Rialto Capital is prepping a $213.6 million deal backed largely by non-performing commercial mortgage loans, according to pre-sales from Kroll Bond Ratings and Moody's Investors Service.

The former agency rated the deal ‘BBB- (sf),’ the latter 'Baa3 (sf).'

An NPL CMBS issued by the firm in early 2012 paid down in January. This was much earlier than some observers had expected, as the performance of the underlying properties beat forecasts.

UBS Securities and Wells Fargo Securities are arranging the upcoming deal. The deal has equity interest valued at $132.3 million, basically the difference between the balance of transaction and the $345.9 million price tag on the acquired assets.

Collateral consists of 1,472 small-balance non-performinfafadg loans linked to real-estate owned properties and performing loans, which are linked to 761 borrowers, according to Kroll. Rialto Real Estate Fund purchased the assets from eight financial institutions. While the buyer paid $345.9 million, the aggregate unpaid principal balance amounted to $843.6 million.

The assets are located predominantly in the south-eastern and southern U.S.

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