Deutsche Bank and Cantor Fitzgerald have teamed up for another commercial mortgage bond conduit securitization, according to Kroll Bond Rating Agency.
The $824.8 million COMM 2014 - CCRE21 is backed by 59 fixed-rate commercial mortgages with principal balances ranging from $1.2 million to $80 million for the largest, One Memorial, a 369,436 square foot, class A office building in Cambridge, Mass.
More than half of the pool balance, or 31 loans representing 67.3%, pay only interest for period of time or for their entire term.
The loan sellers were German American Capital Corp., Cantor Commercial Real Estate, KeyBank National Association, Natixis Real Estate Capital, UBS Real Estate Securities, and Pillar Funding.
The trust will issue 23 classes of certificates of which 15 receive principal and interest and six receive interest only. Kroll assigned preliminary 'AAA' ratings to five classes benefitting from credit enhancement of 30%.
The overall pool has a weighted average loan to value ratio, as measured by Kroll, of 103.9%. That’s higher than the average of 100.7% for the 18 conduits Kroll has rated over the past six months.
The pool of loans is geographically diverse, with only one state, Texas (17%), representing more than 15 % of the total.
The pool is also relatively diverse by property type, although Kroll flagged its exposure is to hospitality, at 19.8%, as high compared with other conduits it has rated recently. Lodging assets have more volatile cash flows than other property types because of their dependence on nightly room rates.