Lineage Logistics plans to issue $655 million of securities backed by a single, two-year, floating rate commercial mortgage loan that is secured by 42 cold storage warehouses owned by 17 special-purpose property companies.

The issuer is the second largest cold storage warehousing and logistics company in North America, according to Standard & Poor's.  It operates 102 cold storage facilities across 21 states. 

The mortgage loan is interest-only for its entire term. Interest-only loan have a higher refinance risk because of the higher loan balance at maturity, compared with loans that amortize, or pay off a portion of the principal eahc year, S&P stated in its presale report.

However, the loan has low leverage, with a 68.8% loan-to-value ratio.  The transaction documents also won’t allow for additional debt.

Credit Suisse, Goldman Sachs and Drexel Hamilton are the lead underwriters on the deal

Fitch Ratings and S&P have assigned the deal, CSMC Trust 2014-ICE, preliminary ratings. The ratings agencies expect to rate $405 million of class A notes, ‘AAA’; $95 million of class B notes, ‘AA-’; $71 million of class C notes, ‘A-’; and $84 million of class D notes, ‘BBB’.


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