JP Morgan and Barclays priced $984 million of commercial mortgage backed securities via JPMBB Commercial Mortgage Securities Trust 2015-C29.

The 10-year, triple-A rated, super senior notes pay swaps plus 87 basis points, in line with the previous conduit priced by Wells Fargo in mid-May, WFCMT 2015-C28. The notes are rated by Moody’s Investors Service, Fitch Ratings and Morningstar.

The senior notes, which are structured with 23.5%, pays swaps plus 117 basis points. Both Fitch and Morningstar rated the notes triple-A, Moody’s has them one notch lower, at ‘Aa2’.

The the 10-year B-piece, which is rated triple-B minus by Fitch and Morningstar, pays swaps plus 360 basis points. That's five basis points wide of where Wells Fargo priced its B-piece. Buyers of the B-rated tranches of CMBS are paid the highest interest rates but are first in line to take losses when loans used as collateral go bad.

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 have a weighted average LTV of 64.5% and an LTV as "stressed" by Fitch of 108%.

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.


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