Wells Fargo Securities is marketing a pool of soured commercial real estate loans owned by Rialto Capital Management via RIAL, Series 2015-LT7.
Rialto purchased the loans between March 2013 and April 2015 from various financial institutions. The assets, which have an aggregate unpaid principal balance of $353.2 million, were acquired for $206.4 million.
In total 639 loans are included in the transaction pool, most of them non performing or real estate-owned assets. However the pool also includes 141 performing loans, which account for 28% of the total.
Approximately 42.3% of the pool (254 assets) are assets that were previously securitized in the COMM 2013-RIAL4 transaction. The RIAL4 transaction is expected to be redeemed on June 25, 2015.
Some of the assets are collateralized by multiple pieces of real estate and/or other items. The majority of the assets are core property types, the three largest of which are retail (116 collateral items, 22.6% of pool, 30.0% of CRE), office (64 collateral items; 20.5% of pool, 27.3% of CRE), and lodging (17 collateral items; 11.2% of pool, 14.9% of CRE).
Kroll Bond Ratings Agency will assign BBB- ratings to $115.6 million, class A notes. The capital structure also incorporates $39.2 million of unrated B notes.
Since 2009, Rialto has been one of the most active acquirers of non-performing U.S.-based loan portfolios, and has participated in the investment of approximately $5 billion of equity.
The issuer has also sold $801 million of notes backed by NPLs via six separate transactions since 2012, five of which were rated by KBRA. To date, all these transactions have performed in line with or better than the issuer’s and KBRA’s projections, as applicable.