Rialto Real Estate Fund is in the market with a new CMBS deal called Rialto Capital, Series 2012-LT1.

The transaction that is being marketed by JPMorgan Chase and Wells Fargo & Co. is  a  liquidating vehicle that monetizes recoveries from pools of nonperforming loans backed by mortgages on real estate through asset liquidation, according to a Moody's Investor Service pre-sale report.

The rating agency will rate the $132 million deal and has assigned the single-tranche offering a preliminary rating of 'Baa3'. Fitch Ratings has also assigned the deal a 'BBB-" rating.

The securitization is backed by 271 performing and nonperforming mortgages securing 266 properties, 11 unsecured loans, and 38 properties acquired at acquisition or through foreclosure.

The collateral also includes ownership interests in the special-purpose vehicles holding the mortgages and properties, rights under the mortgage documents, all accounts, and any and all proceeds and the rights to receive payments thereunder.


Proceeds from liquidations of the resolved loans backing the securities are generally used to pay down rated debt before returning capital to the sponsors, incentivizing sponsors to execute timely and efficient resolutions.

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