Lead manager Banc of America Securities and co-manager Greenwich Capital Markets were showing investors a triple-net lease franchise deal from U.S. Restaurant Properties (USRP) last week.
The $180 million, floating-rate, one tranche transaction was wrapped to a triple-A by MBIA. The deal priced at 48 basis points over the one-month Libor.
According to buyside sources, the deal includes 273 mortgaged properties, and is backed by a pool with an appraised value topping $250 million, for a loan-to-value of about 70.7%. Concepts with large concentrations (more than 10%) in the collateral pool include Burger King, Arby's, Spaghetti Warehouse, and El Chico. Tenants making up more than 10% include Sybra, Spaghetti Warehouse, and El Chico Restaurants.
The deal is rated by Moody's Investors Service and Standard & Poor's.
USRP will be the second franchise triple-net lease deal brought to market by BofA this year, according to sources. BofA was lead manager on CNL Financial Services' $150 million triple-net lease brought to market in July.
Although the leases are made to franchisees and franchisors of restaurant concepts, the collateral is heavily secured by real estate (and are marketed as CMBS), in the triple-net lease structure. In these deals, the issuer had purchased the properties from its borrowers, then leased them back. The tenant is obligated to pay maintenance, taxes and insurance.
U.S. Restaurants Properties, which is a first-time securitizer, is a REIT. It is said that deal is being done to refinance the company's existing credit facility. USRP is a publicly traded company (USV) located in Dallas, TX.