Deutsche Bank and Cantor Fitzgerald are marketing a $1.2 billion of bonds collateralized by 63 commercial mortgage loans, according to Kroll Bond Rating Agency.
The lconduit, COMM 2013-CCRE12, includes five tranches of ‘AAA’-rated notes that benefit from credit enhancement of 30%.
The loans have principal balances ranging from $3.0 million to $150.0 million for the largest loan in the pool, which is secured by 175 West Jackson (12.5%), a 1.5 million square foot, Class-A office tower located in Chicago, Illinois.
The top five loans, which also include Miracle Mile Shops (12.1%), Westlakes (5.7%), Oglethorpe Mall (5.0%), and 9 Northeastern Boulevard (4.5%), represent 39.9% of the initial pool balance, while the top 10 loans represent 56.5%.
Kroll cited as a concern the deal’s high leverage; it has a weighted average in-trust KLTV of 101.5%. This is above the average of the 18 CMBS conduits (96.2%) KBRA has rated over the past six months, which ranged from 88.6% to 96.6%.
The deal’s strengths include its geographic diversity: the underlying properties are located in 31 states, the District of Columbia and the U.S. Virgin Islands, and there are only two state exposures which represent more than 10.0% of the pool balance, Illinois (14.7%) and Nevada (12.4%).
The transaction also has exposure to all of the major property type segments, though it has a sizeable retail (31.3%) and office (27.0%) exposure.
This is the second CMBS conduit from Deutsche and Cantor in less than a month; in early October, they priced an $813 million deal, COMM-CCRE11.