More details on the structural terms of the upcoming sizable CMBS deal from Extended Stay were revealed this week.
The $2 billion deal, Extended Stay America Trust 2010-ESH, is managed by Deutsche Bank Securities and JPMorgan Securities.
Moody's Investors Service assigned provisional ratings of 'Aaa' to the $1.2 billion class A certificates; 'Aa2' to $245 million of Class B certificates; 'A2' to $243 million of class C certificates; and 'Baa2' to $312 million of class D certificates. A single loan backed by first-lien commercial mortgages for 664 extended-stay hotels are backing the CMBS.
In a presale report, Moody's said the strong ratings for the Extended Stay issue are bolstered by the structure of the deal, which includes "properties that are cross-collateralized and cross-defaulted."
Although the pool of the mortgages in the CMBS have mirrored the entire lodging sector by "deteriorated dramatically" since the fourth quarter of 2009, the decline is offset somewhat by a rebound in recent quarters, according to analysts.
Extended Stay exited bankruptcy earlier this month after Centerbridge Partners, Paulson & Co. and Blackstone Group closed their $3.93 billion acquisition of the company. According to market reports, the acquired the hotel participated in an auction last May.
For more preliminary details on the deal, please click the link below from the ASR Scorecards database.