JP Morgan Chase is marketing a $755.3 million if commercial mortgage backed securities, according to a presale report published by Kroll Bond Rating Agency.
The deal, JPMCC 2014-FL4, is collateralized by nine loans originated between June and December 2013 that are in turn secured by the fee and leasehold interests in 61 properties. While the aggregate in-trust balance of collateral is $755.3 million, financing for the properties securing these loans also includes $406.8 million of debt held outside the trust.
All of the loans were originated by the trust asset seller, JPMorgan Chase Bank, National Association, which is also the sponsor for the transaction.
The trust will issue five classes of notes: a $392.4 million tranche that benefits from credit enhancement of 48.05% has been assigned a preliminary AAA’ rating; there is also a $110.3 million tranche with a preliminary AA- rating; a $77.0 million tranche with a preliminary A- rating; a $135.7 million tranche with a preliminary BBB- rating; and a $39.9 million tranche with a preliminary BB- rating. All five classes of notes mature in December 2030.
Among the deal’s strengths, Kroll said that it calculates the aggregate in trust loan-to-value ratio at a relatively low 71.8%.
However, six of the nine loans, which comprise 55.4% of the aggregate trust balance, are secured by hospitality properties, which can have more volatile cash flows than other property types due to their dependence on nightly room rates
