Deutsche Bank and Cantor Fitzgerald issued priced guidance on their publicly offered, $925 million commercial mortgage backed securities conduit.
The conduit COMM 2014-CCRE16 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 are being offered, according to a deal prospectus filed with the Securities and Exchange Commission. The 2.81-year, notes are being offered with guidance at the 50 basis points area over swaps; the 4.93-year notes are being offered at 60 basis points area over swaps; the 7.34-year, notes are being offered with talk at the 78 basis point area over swaps; and the 9.97-year notes are being offered with talk in the 90 basis point area. No priced guidance was offered on the super-senior, 9.92-year notes.
The subordinate, 10-year, triple-A rated class A-M tranche structured with 23% credit enhancement are being offered at 110 basis points area over swaps.
Further down the curve, the 10-year class B and C notes are being offered with price talk in the 145 basis point area over swaps and 190 basis points area over swaps, respectively.
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.
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%).