Last week Credit Suisse First Boston funded and closed the year's second franchise deal, placing roughly $152 million in class A notes with investors for Capital Auto REIT in a deal called CARS-DB4.
The top two tranches of the four-part deal, worth an additional $173 million, were retained by the issuer, according to market sources. The total volume of the securitization was approximately $325 million, backed by a pool appraised at about $460 million, according to a rating agency presale report. CARS was wrapped to a triple-A by MBIA.
The 7.4-year A-2 class priced at 80 over swaps, while the 16.8-year A-3 priced at 100 over swaps, market sources said.
Capital Automotive RIET makes loans to car dealerships, and, as implied by its REIT status, the loans are primarily secured by real estate and are, in fact, triple-net-lease mortgage notes. Though the franchise sector has been on rocky ground from some headline failures, Falcon Financial has done a fine job validating the collateral performance of loans to auto dealerships, sources said.