Goldman Sachs has launched the first private label commercial mortgage securitization of the week, according to Kroll Bond Rating Agency.

The $1 billion GSMS 2016-GS4 is backed by 33 fixed-rate commercial mortgages that are secured in turn by 95 properties, all of them originated by Goldman or its affiliates.

The loans have principal balances ranging from $2.6 million for the smallest loan to $100 million for each of the two largest loans in the pool, AMA Plaza (9.7% of the principal balance), a 1.1 million square foot, Class-A office tower in downtown Chicago, and 225 Bush Street (9.7%), a 575,363 square foot, Class-B office building in San Francisco.

The top five loans, which also include 540 West Madison (7.3%), US Industrial Portfolio (7.3%), and Quad at Whittier (6.8%), represent 40.9% of the initial pool balance, while the top 10 loans represent 65.8%.

The overall pool has a weighted average in-trust loan-to-value ratio, as measured by KBRA, of 89.4%. That is lower than the average of the 17 CMBS conduits KBRA rated over the last six months (97.2%). The pool’s exposure to individual loans with KLTVs in excess of 100% (22 loans, 52.4%) is also lower than the average for the comparable set (57.7%). “Lower leverage implies higher borrower equity levels, lower default probability, and lower overall loss severity should a default occur,” the presale report states.

However, the pool’s two largest loans, AMA Plaza and 225 Bush Street, have terms of five years, while the bonds to be issued by the securitization trust mature in 10 years. “Should these loans pay off as expected, the pool’s then KLTV and balloon KLTV for the remaining assets would meaningfully increase to 98.4% and 88.1%, respectively, assuming all else is held constant,” the presale report states.

This calculation takes into account the fact that, absent defaults, some of the remaining loans will repay part of their principal. The scheduled deleveraging that will occur from amortization will reduce the aggregate pool principal balance by 8.3% through the life of the transaction, which is below the average of 10.9% for the conduits rated by KBRA over the past six months.

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