MIRA Trust 2023-MILE is preparing to issue $293.8 million in mortgage pass-through certificates that represent the beneficial interest the trust portion of a $425 million, five-year, fixed-rate commercial mortgage loan that will not amortize any principal.
A simple fee interest in Miracle Mile Shops, one of the most successful malls in Las Vegas, secures the loan that is the deal's collateral, according to a pre-sale analysis from Fitch Ratings. Notes A-1-S1 and A-1S2 are controlling trust notes, Fitch said. While the deal transaction will issue notes through four classes of notes. The remaining $131.2 million of non-controlling notes will not be part of the current trust, but should be contributed to future securitization transactions.
Fitch assigned a stressed debt service coverage ratio (DSCR) of 1.38x to the $425 million securing home loan, while it is also have a 64.8% loan-to-value ratio. Miracle Mile Shops had overall sales of $258.2 million, excluding temporary tenants, with inline sales of $891 per square foot. Fitch also notes that the property has debt of $844 psf, Fitch said.
Despite some of the deal's more positive metrics, Fitch pointed to a number of characteristics that pose potential credit drawbacks to the notes, according to Fitch. Among the most glaring is that Miracle Mile Shops have significant tenant lease rollover, with 53.7% of the mall's net rentable area (NRA) and 66.1% of its base rent scheduled to roll over during the five-year term of the notes, Fitch said.
The loan's status as full-term and interest only means that no principal will pay down on the loan for its entire term, a characteristic that is correlated with higher refinance risk, according to Fitch.
Bank of America, Goldman Sachs and Morgan Stanley Bank are managers on the deal, according to information in the Asset Securitization Report's deal database.
Fitch expects to assign ratings of 'AAA' on the class A notes; 'AA-' on the class X notes; 'AA' on the class B notes and 'AA-' on the HRR notes, according to Fitch. Classes A, B and HRR all have average lives of 4.97 years, according to the ASR's database.
