Paribas recently issued Japan's biggest commercial mortgage backed-securitization to date, adding to the torrent of CMBS deals in the domestic market.

Originated by Japanese supermarket operator Mycal Corp., the 41 billion ($394 million) note issue is ultimately backed by rental income from a pool of 10 shopping malls located throughout Japan. The properties were first entrusted to Yasuda Trust & Banking, which sold three classes of trust certificates to an offshore SPC. That SPC funded the purchase with a non-recourse loan, a mezzanine bank loan, and an issue of preferred shares. A second offshore SPC, called New Shopping Centres Funding Corp., issued 41 billion of notes to fund the non-recourse loan to the borrowing SPC. Mycal will lease back and continue to occupy the malls.

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