Morgan Stanley and Bank of America Merrill Lynch are marketing a commercial mortgage securitization that relies on the “L-shaped” strategy to comply with risk retention.

In order to align their interest with those of investors, Morgan Stanley and KeyBank (the third loan seller) are holding on to a portion of each class of securities to be issued equivalent to 2.45% of the economic risk of the deal; in addition, a fund controlled by private equity firm KKR will hold on the most junior class of securities to be issued equivalent to a 2.57% interest.

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