JPMorgan Chase is said to be planning the launch a $739 million deal backed by floating-rate CMBS.

The bank has already placed the riskiest parts of the offerings with buysiders, according to a Bloomberg report, The triple-A and double-A notes are expected to be offered to investors sometime this week.   

News of the deal comes right behind the successfully priced $1.1 billion Wells Fargo/Royal Bank of Scotland CMBS deal, which priced its deal well within original price talks.

The super-senior, triple-A rated class of 10-year CMBS traded at 140 basis points over interest-rate swap rates, down from the original price talk of 150 basis points, according to market reports.

The double-A and single-A notes also managed to price 25 basis points and 50 basis points inside the tight end of initial guidance, JPMorgan Securities analysts said in a report.

"Private A4s also appear to have caught a bid as investors struggle to source new issue paper amid light dealer inventories and limited visible supply," analysts said.

Insurance companies are expected to provide an important source of demand for new-issue paper. Although interested, these players no longer had capacity for private securities. The re-introduction of public bonds means insurance companies are likely to step up their demand for CMBS issuance, JPMorgan analysts reported.

"We estimate that insurance companies now represent the dominant investor group, making up nearly 40% of participation in recent deals – primarily at the expense of money managers," explained analysts, "Going forward, we expect insurance company demand to grow as their legacy portfolios wind down."



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