Deutsche Bank and Cantor Fitzgerald have priced $925 million of commercial mortgage backed securities to be issued via their COMM 2014-CCRE16 conduit, according to regulatory filing.
The transaction is backed by 56 loans secured by 84 properties. CastleOak Securities, KeyBanc Capital Markets and Credit Suisse Securities are co-managers on the deal.
Five classes of super-senior, triple-A-rated notes that benefit from 30% credit enhancement priced within guidance. The 2.81-year notes priced at 50 basis points over swaps; the 4.93-year notes priced at 60 basis points over swaps; and the 7.34-year, notes priced at 78 basis points over swaps.
The 10-year super senior notes priced at swaps plus 88 basis points. The subordinate, 10-year, triple-A notes priced at swaps plus 110 basis points.
Further down the curve, the 10-year class B notes priced five basis points tighter than initial guidance, at swaps plus 145 basis points. The 10-year, class C notes priced at swaps plus 190 basis points.
Both Fitch Ratings and Kroll Bonds Rating Agency have noted that the pool backing this deal has an elevated loan to value ratio higher than any of previous conduit rated by each agency so far this year. KBRA said that the pool had a weighted average in-trust LTV of 104.3%. By comparison, the 18 CMBS conduits rated by KBRA over the past six months had in-trust LTVs ranging from 90.8% to 103.8%, with an average of 98.0%.
The pool is also exposed to highly leverage loans with LTVs in excess of 100% (67.3%) is also higher than each of the last 18 deals KBRA has rated (49.9%), which ranged from 37.2% to 73.2%.
Office properties represent the largest portion of the pool at 30.8%; retail properties represent 21.6%. Both sector have elevated likelihood of default in Fitch’s analysis, when compared to other CMBS assets.