Morgan Stanley and Bank of America priced $1.09 billion of commercial mortgage backed securities that are collateralized by 76 fixed-rate commercial mortgage loans secured by 110 properties, according to a regulatory filing.
The super-senior, 10-year notes priced at swaps plus 86 basis points. That is just one basis point wider than a comparable trache issued from Wells Fargo Commercial Mortgage Trust 2014-LC16, which priced on May 23.
The 2.73-years, class A-1 notes priced at 45 basis points; the 4.89-years, class A-2 notes priced at swaps plus 52 basis points; the 7.38-year, class A-SB notes priced at swaps plus 72 basis points; the 6.90-years class A-3 notes priced at swaps plus 90 basis points; the 9.63-year, class A-4 notes priced 83 basis points; and the 10-year, class A notes priced at 105 basis points.
Further down the curve, the 10-year, AA-’ class B notes priced at 135 basis points and the 10-year, A-’ class C notes priced at 185 basis points.
Kroll Bond Ratings noted in its presale report on the deal that the pool has a higher lodging concentration (24.0%) than any of the conduits it has rated over the previous six months. Lodging assets can have more volatile cash flows than other property types due to their dependence on nightly room rates.
However some of the risk is offset by the fact that 12 of the lodging loans amortize throughout their respective terms, with a weighted average amortization schedule of 27.3 years. Many commercial mortgages pay interest only for a period of time.
All of the loans were contributed by three mortgage loan sellers: Bank of America, National Association (26 loans, 39.8%), Morgan Stanley Capital Holdings (29 loans, 36.4%) and CIBC (21 loans, 23.9%).