Three issues of commercial mortgage bonds backed by a single borrower priced last week for a total of $2.6 billion.

Deutsche Bank led two of the deals: the $550 million COMM 2014-SAVA,and the $1.4bn COMM 2014-KYO. COMM 2014-SAVA, backed by a large loan that is secured by a nursing home portfolio “broke several basis points inside of talk, helping to bolster the new issue single asset market”, according to Trepp.

The deal’s 1.93-year, triple-A notes priced at Libor plus 115 basis points, according to a person familiar with the deal.  The $98.5 million of 1.93-year, class B notes, rated double-A at Libor plus 175 basis points.

The single-A, 1.93-year, class C notes priced at Libor plus 240 basis points. At the triple-B level, the 1.93-year, class D notes priced at Libor plus 310 basis points.

There is an additional $150 million of B-note as well as $240 million in mezzanine debt, which lies outside of the CMBS trust.    

Deutsche Bank’s second deal, COMM 2014-KYO, is backed by a single loan that is secured by five full-service hotels located in Hawaii and California.

The triple-A rated, 1.94-year, class A notes priced at Libor plus 90 basis points, according to a person familiar with the deal. The 1.94-year, double-A rated class B notes priced at Libor plus 130 basis points. Further down the curve the deal offered its 1.94-year, triple-B notes at  Libor plus 200 basis points and the triple-B minus, 1.94-year notes at Libor plus 235 basis points.

The loan is secured by cross-collateralized and cross defaulted first-lien mortgages secured by the Kyo-ya Portfolio hotel properties.

Starwood Hotels and Resorts operate the hotels under various Starwood brands including Sheraton, Westin, and Luxury Collection.

The deal refinances $1.10 billion of debt that was previously securitized in GSMS 2013-KYO.  

Also priced last week was another large loan deal backed by hotel assets — JPMCC 2014-INN. According to Interactive Data the senior notes priced at Libor plus 85 basis points.

The JP Morgan led, $635 million single-borrower CMBS, us a six-tranche deal backed by 47 hotel properties. Among the 47 lodging properties that secure the loan are 36 extended-stay properties. The financing to borrower NorthStar Realty Finance also included US$205m in mezzanine debt, which lies outside of the CMBS trust.  

Barclays analysts said in a report on Friday that lower interest rates have made securitized large loans via securitization “more competitive to banks and insurers,” recently.  Barclays illustrates in the chart below, how large loan CMBS deals have domintaed issuance in the month of June.

Single borrower soared to $5.7 billion in June, more than the $5.3 billion in issuance in the first five months of 2014, the report states.


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