Resource Capital plans to securitize a $312.9 million pool of 19 commercial mortgages secured by multi-family, office, and mixed-use properties, according to Moody’s Investors Service.
Moody’s describes the deal, dubbed Resource Capital Corp. 2015-CRE4, as a commercial real estate collateralized loan obligation.
The trust will issue three tranches of notes: Moody’s has assigned a preliminary Aaa’ to $179.9 million of A notes that benefit from 42.5% effective subordination and have an assumed coupon of one-month Libor plus 145 basis points; a Baa3’ to $43.8 million of B notes with 28.5% subordination and an assumed coupon of Libor plus 300 basis points; and a B3’ to $26.6 million of C notes B3 with 20% subordination and an assumed coupon of Libor plus 465 basis points.
None of the loans are publicly rated but are instead “credit assessed,” which means that Moody’s may not provide the same level of on-going disclosure to investors that it would for a publicly rated asset. And all of the loans are assessed at below investment grade, most at the equivalent of Caa1’. However, the deal’s administrator will provide ongoing monthly reporting on the performance of the collateral.
The portfolio has an “average contributed debt” loan-to-value ratio, as calculated by Moody’s, of 127.6%. And some of the loans pay interest only, and no principal, for their entire terms.
Wells Fargo Bank will act as the servicer, and Resource Real Estate will act as special servicer.
Nearly three fourths (72%) of the collateral is backed by multi-family property, another 11% is office and 7.9% is mixed-use (a combination of office and retail).