JPMorgan Chase is preparing a $250 million CMBS deal backed solely by assisted living facilities, according to presale reports.
JPMorgan is the sole underwriter on the deal, which is expected to close Aug. 21.
The transaction, called J.P. Morgan Chase Commercial Mortgage Securities Trust 2013-ALC, features a senior tranche, three subordinate tranches, and two tranches of exchangeable certificates.
Both Standard and Poor's and Fitch Ratings assigned preliminary 'AAA' ratings to the $152 million A notes. The agencies also agreed on the $53 million B notes; the $34 million C notes; the $11 million D notes; and the two classes of exchangeable notes, which can be exchanged for any other notes equal to the total amount, rating them 'AA-', A-, 'BBB', 'BBB', and 'BBB', respectively.
The notes are backed by the beneficial interests in a two-year loan floating-rate mortgage loan secured by the fee and leasehold interests in 79 assisted-living and congregate care facilities. The collateral also includes all furniture, fixtures, equipment and personal property used in the operation of each property. JP Morgan Chase Bank is the mortgage loan seller and orginator.
Fitch describes the deal as 'low leverage'. The loan has a loan-to-value ratio of 56.7% and a debt per key of $67,531, which is lower than similar transactions rated by Fitch. No additional debt is allowed. S&P places LTV even lower at of 53.4%.
The deal also benfits from a diverse collateral pool, with secondary markets in 15 states respresented. The largest state exposure is Indiana with 15 facilities representing 19.0% by number of properties and 16.9% by allocated loan balance. However, S&P notes that it is concentrated by sponsor and property type and considers healthcare properties to be among the riskiest property types due to the nature of the properties and their dependence on federal and state reimbursements.
Wells Fargo Bank will act as both the master and special servicer for the notes.