A pool of Small Business Administration (SBA) loans will secure a $45.1 million asset-backed deal from the CIM Small Business Loan Trust, due out around the first week of March.
The unguaranteed loans themselves are secured by one or more mortgage properties, and virtually all of those mortgages are first-liens commercial real estate loans, according to a pre-sale report from S&P Global Ratings.
Overall the pool resembles that of the CIM Small Business 2018-1 pool, S&P said, although the current pool varies noticeable in some ways, such as principal balance and seasoning. On average, the supporting loans in the 2023-1 pool have a principal balance of $346,338, higher than the $303,916 in the 2018-1 pool. This is largely a result of external and internal cost pressures, S&P said, especially inflationary and construction increases.
Also First Western SBLC, the lender that sold the loans to the trust, according to the Asset Securitization Report's deal database. First Western also shifted to lending to higher tier franchises with increased collateral quality, the rating agency said. Some 185 loans, with an aggregate principal balance of $64 million, are in the deal.
On a weighted average (WA) basis, the loans have an original term of 300 months, with an average remaining term of 42 months. On a WA basis the loans have a FICO score of 786 and a debt service coverage ratio (DSCR) of 1.86x, S&P said.
Deutsche Bank Securities is the initial purchaser on the deal, which will issue just one tranche of notes benchmarked to the Secured Overnight Financing Rate (SOFR).
S&P will assign a rating of 'AA-' to the notes, initially, which have a break-even default rate cushion of 2.39%, the rating agency said.
