Deutsche Bank’s priced $1 billion of commercial mortgage bonds Tuesday, according to a regulatory filing.
The deal, COMM 2015-DC1, is rated by Moody’s Investor Service, Fitch Ratings and Kroll Bond Rating Agency.
The benchmark 10-year triple-A-rated senior bonds pay swaps plus 88 basis points; that's two basis points tighter than the benchmark, triple-A notes issued from Morgan Stanley’s/ Bank Of America Merrill Lynch’s conduit, MSBAM 2015-C21, which priced last week.
“The [COMM 2015-DC1] bond priced in line with guidance, making it the second tightest spread we have seen so far this year,” Deutsche Bank analysts stated in a report today. “The benchmark bond in the prior two deals priced at spreads of 86 to 92 basis points.”
COMM 2015-DC1 is backed by 67 fixed-rate commercial mortgages secured by 81 properties. The loans, contributed by Deutsche Bank’s German American Capital Corporation (19 loans, 47.7%), Natixis Real Estate Capital LLC (14 loans, 19.6%), Jefferies LoanCore LLC (16 loans, 16.5%) and UBS Real Estate Securities Inc. (18 loans, 16.2%), were used to refinance existing debt, make property acquisitions and for recapitalization. The loans have a weighted average life of 8.5 years.
The pool also has a sizable exposure to high leverage loans (39 loans, 64.3%) with a loan-to-value (LTV) ratio as gauged by KBRA above 100%. The overall pool has a weighted average in-trust LTV of 103.5%, above the average of the 19 CMBS conduits KBRA rated in the last six months. These transactions had in-trust LTVs ranging from 96.8% to 106.4%, with an average of 101.7%.
There are another three deals totaling $3.4 billion, ready to price. The pipeline includes American Homes 4 Rent’s $566 million single family rental bond, Blackstone’s $1.8 billion large loan CMBS backed by its Motel 6 portfolio and Wells Fargo’s $1 billion conduit, WFCM 2015-C27, which began marketing today.
Analysts at BofAML expect March’s new issue calendar to deliver about $8.9 billion of single-asset/single- borrower deals and $5.8 billion of conduit transactions. They think that this could test the relatively stable new issue deal spreads seen over the last few months.