JP Morgan and Barclays are marketing $984 million of commercial mortgage backed securities via JPMBB Commercial Mortgage Securities Trust 2015-C29.
Fitch Ratings assigned AAA’ ratings to the senior class A notes that benefit from credit enhancement of 30%; the junior class AS notes, which are also rated AAA’, are structured with credit support of 23.5%.
At the subordinate level, Fitch rated the class B notes with credit enhancement at 18%, AA-, the class C notes, which benefit from credit enhancement at 13.5%, are rated A-’; and the class D notes with credit enhancement at 8.1% are rated BBB-.
Fitch noted in the presale that JPMBB 2015-C29 is backed by a pool of loans with lower leverage than other recently issued, fixed-rate, multiborrower transactions.
The transaction is backed by 63 loans that are secured on 85 properties. The average loan included in the pool is sized at $15.6 million with an average interest rate of 4.22%. The loan has a weighted average LTV of 64.5% and Fitch LTV of 108%. The most recent transaction that Fitch rated, WFCM 2015-NXS1, had a WA LTV of 65.4% and a Fitch LTV of 114.1%.
Fitch calculates stressed LTVs taking in to account factors such as long-term averages for cap rates rather than strictly current market cap rates. This methodology moderates the effect of the dramatic rise in prices without the corresponding cash flow growth by literally discounting the cash flows by historical averages rather than the subsidized low discount rates of today.
The pool also benefits from greater amortization of the debt relative to other CMBS conduits issued this year. According to the presale, 13.9% of the initial pool balance will be paid off prior to maturity. That's greater than the 2014 average of 12.0%. Six loans (17.5% of the pool) pay only interest and no principal for their entire terms and 33 loans (49.12%) pay only interest for part of their terms. One loan (1.54%) is fully amortizing. The remaining 23 loans (31.8%) are amortizing balloon loans with loan terms of five to 10 years.
Office properties back 24.3% of loans in the pool, retail properties represent 23.2% of the pool and hotel properties represent 20% of the pool.