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Deutsche Bank, Cantor Ready $1.1B CMBS

Deutsche Bank and Cantor Fitzgerald are marketing a $1.1 billion of commercial mortgage bonds backed by 56 loans secured by 84 properties.

CastleOak Securities, KeyBanc Capital Markets and Credit Suisse Securities have also contributed collateral to the deal, COMM 2014-CCRE16, according to a Fitch Ratings presale report.

Kroll Bond Ratings Agency and Fitch have assigned preliminary ratings to the 18 classes of notes to be issued by the trust. Ther super-senior, triple-A-rated classes benefit from 30% credit enhancement and the subordinate, triple-A rated class A-M tranche benefits from 23% credit enhancement.

Both Fitch and Kroll noted that the pool 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.

The largest loan included in the pool (11.3%) is a $120.0 million loan secured by 25 Broadway, an office property in New York City. The top five loans, also include iPark Norwalk (8.8%), Sanibel Harbor Marriott Resort & Spa (8.0%), Google and Amazon Office Portfolio (6.3%), and West Ridge Mall & Plaza (5.1%).

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