So much for CMBS issuance slowing down after Thanksgiving.
Two new conduits, one from J.P. Morgan and one from Morgan Stanley and Bank of America, totaling nearly $2 billion launched on Tuesday. They followed a $900 million deal from Citigroup on Monday.
Tuesday’s deals are both characterized by relatively low leverage, by recent standards, and both rely on a few, high-quality loans to reduce the overall leverage in their collateral pools, a process known as credit barbelling. In fact, both have a portion of the same loan, on a luxury hotel in Hawaii, as their top loan.
The $997.6 million JP Morgan Chase Commercial Mortgage Securities Trust 2016-JP4 has DSCR and LTV, as measured by Fitch, of 1.28x and 99.4%, respectively. That’s better than the YTD 2016 average Fitch DSCR and Fitch LTV of 1.20x and 105.6%, respectively
Three loans representing 21.8% of the pool have investment-grade credit opinions. Hilton Hawaiian Village (9.4%), the largest loan in the pool, has an investment-grade credit opinion of triple-B minus on a stand-alone basis; 9 West 57th (6.3%) has an investment-grade credit opinion of triple-A on a stand-alone basis; and Moffett Gateway (6.0%) has an investment-grade credit opinion of triple-B-minus on a stand-alone basis.
The loans were originated by JPMorgan Chase Bank, Starwood Mortgage Capital, Benefit Street Partners, and Ladder Capital Finance. The $906 million Morgan Stanley Bank of America Merrill Lynch Trust 2016-C32 a SCR and LTV, as measured by Fitch, of 1.21x and 103.1%, respectivel.
Two loans, representing 12.7% of the pool have investment-grade credit opinions. Hilton Hawaiian Village (6.9%), the largest loan in the pool, has an investment-grade credit opinion of ‘BBB–sf’* on a stand-alone basis. Potomac Mills (5.7%) has an investment-grade credit opinion of ‘BBBsf’* on a stand-alone basis. The two investment-grade credit opinion loans have a weighted average Fitch DSCR and Fitch LTV of 1.55x and 62.1%, respectively