Canada's CMBS market is an asset class whose time has come, according to attendees at last week's Whistler conference, with much talk about new deals coming north of the border.
Rumors are swirling about Montreal-based Laurentian Bank potentially bringing a C$250 million ($179 million) deal to market soon, and the list is growing. Virtually all the big banks are thinking of CMBS deals, sources said, with a big impetus coming from large government employee-based pension funds.
"The popularity of recent deals has some investors wanting more of the same," said one attendee. "They've been asking us if there's other deals coming, and if we're having trouble getting buyers down the scale, maybe we should give them what they want."
Last week, saw the closing of the most recent CMBS deal, Bank of Nova Scotia's Rosedale Trust. The single-seller CP conduit dealt commercial mortgages from Manulife Financial, with most of the mortgages originated by Manulife, and a smaller number, around 17% of the total portfolio, part of Manulife's purchase of assets of the now-defunct Confederation Life.
The deal had a C$230 million ($165 million) R1-high-rated piece, C$10.4 million ($7.2 million) in R1-mid issuance, and a C$5.8 million ($4.1 million) single-A rated sub note.
Sources close to the deal said it priced "very efficiently" and was as well received as last month's Merril Lynch-Levesque Beaubien Geoffrion-led CMBS deal.
"They had tremendous oversubscription," said one source about that deal. "It looks good for this market as a whole." - TC
