Deutsche Bank and Cantor priced an $863 million securitization of 49 commercial mortgage loans secured by 60 properties, according to a regulatory filing.
The deal, COMM 2014-CCRE18, received triple-A ratings for all six tranches of class A notes from Fitch Ratings, DBRS and Standard & Poor’s.
The $47.08 million class A-1 notes with a weighted average life (WAL) of 2.85 years priced at a spread of swaps plus 45 basis point; the $139.7 million class A-2 notes with a WAL of approximately five years priced at swaps plus 52 basis points; the A-SB notes with a WAL of approximately seven years priced at swaps plus 72 basis points; the $20.350 million class A-3 notes priced at swaps plus 80 basis points, also with a WAL of approximately seven years, while the $195 million A-4 notes priced at swaps plus 76 basis points. The $241.73 million class A-5 notes with a 9.76-year WAL priced at swaps plus 78 basis points.
All of the class A notes benefit from 30% credit enhancement.
Among the deal’s strengths, according to S&P, is the geographic diversity of the loan pool, with 60 properties spread across 25 different states. Approximately 33.0% of the pool is located in three major metropolitan areas, New York, Los Angeles, and Philadelphia.
The transaction is also diversified by property type, with 30.5% of the trust balance backed by office assets, 25.4% by residential assets, 23.7% by retail assets, 12.5% by lodging assets, and 7.9% by industrial assets.
However S&P said in its presale report that the transaction has “moderately high” leverage, with a 89.1% weighted average loan-to-value ratio. The transaction leverage is 64.8%, based on the appraiser's valuation on a pool-wide basis, but S&P's values on the underlying assets are 26.3% below the issuer's values, as indicated by the appraisals.
