STORE Capital Corp. is preparing a $190 million commercial net lease mortgage-backed securitization, according to a Standard & Poor’s presale report.
STORE Master Funding I LLC's, STORE Master Funding II LLC's, STORE Master Funding III LLC's, and STORE Master Funding IV LLC net lease mortgage notes series 2013-3 is structured with A’ rated class A notes and BBB’ rated class B notes. Credit Suisse is the lead underwriter on the deal.
The notes are backed by 495 commercial real estate properties across various industry sectors, including the rental cash flows on these propertied due under triple-net leases and hybrid leases with the properties' tenants.
The triple-net nature of the leases requires the tenants to pay all maintenance, taxes, and insurance on the properties.
A hybrid lease is composed of a ground lease--or sublease for properties in which the issuer has a ground lease interest--on the land and a mortgage on the building. This transaction includes several hybrid leases constituting approximately 6% of total aggregate appraised value, according to the presale report.
According to the S&P presale, these leases “typically generate predictable cash flows because of contractual lease or loan terms and minimal, if any, landlord or lender responsibilities.”
STORE invests in single-tenant operational real estate, including restaurants, furniture and home improvement stores, educational and daycare facilities, movie theaters, and service and distribution facilities. Its principal equity investors are investment funds managed by Oaktree Capital Management L.P.