A $1.4 billion CMBS deal for General Electric was launched last week by Donaldson, Lufkin and Jenrette and Goldman Sachs, sources say. The eight-tranched deal was comprised of two triple-A pieces, two double-A pieces, two single-A pieces and two triple-B pieces. The collateral was made up of all commercial loans, 45% of which came from GE, 37% from DLJ and 17% from Archon, an affiliate of Goldman Sachs. The transaction had not priced at press time.
According to one market source, the offering is the largest CMBS deal that GE has ever done, and is made up of 292 loans.
Prudential is said to be the next player in the CMBS market, with an upcoming $1.1 billion deal in conjunction with Greenwich National Realty Funding. Collateral from Prudential, Greenwich and Bridger Commercial Funding will back the deal, sources say. The roadshow for this offering will begin in New York on June 8.
"Towards the end of June, there will be a fair amount of CMBS issuance, perhaps $7 billion to $8 billion," predicted an MBS portfolio manager. "But July will be a light month. For some Wall Street firms, there is a bit of a rush to securitize and settle transactions before July 1, so $7 billion might actually be a low estimate [for June].
"Many companies are worried about having a lot of loans on their balance sheet as the second quarter closes."
A CMBS trader agreed, saying that "the real slowdown will begin in late July." - AT
