JP Morgan’s Innkeeper CMBS Priced Wide

J.P. Morgan priced the top rated portion of its JPMCC 2013-INN CMBS about 10 basis points wide to guidance.

The deal priced its triple-A notes, structured with a two-year weighted average life and a five-year weighted average life at 140 basis points over the one month Libor and 150 basis points over the one month Libor, respectively.

Standard & Poor’s said today that further down the credit curve, the notes widened by 15 to 35 basis points. Fitch Ratings assigned ‘AA-‘ ratings to the class B notes, the class C notes are rated ‘A-‘,  the class D notes are rated  ‘BBB-’ and the class E notes are rated ‘BB’.

The $575 million CMBS is backed by 51 extended stay, limited service and fill service hotel properties. The properties were previously controlled by Innkeepers USE Trust which was acquired by Apollo Investment.

“Uncertainty from Washington and widening spreads may delay some deals scheduled to come to market, in our view,” said S&P analysts.

Last week, Deutsche Bank and Cantor Fitzgerald priced a conduit also wide of spread guidance. The deal dubbed COMM 2013-CCRE11 was place at levels that were “significantly wider” than initial talk, according to analyst at Barclays. At the super senior level spreads were off by 14 basis points and at the bottom of the structure the triple-B notes widened by 40 basis points.

Here, widening was driven by underwriting concerns. The deal has heavy interest only exposure – with almost 72% of the pool backed by these loans. Analyst at Bank of America Merrill Lynch said in a report that the exposure to I/Os is “the most of any deal issued in almost two years, and the second highest concentration of loans in the top 10 over the same period.”