Velocity Commercial Capital Loan Trust is returning to raise $263.1 million in commercial mortgage-backed securities.
The portfolio's collateral pool spans a range of assets, from investor properties with one to four units to small-balance commercial (SBC) mortgages that finance an array of commercial, multifamily rental and mixed-use properties. All told, there are 744 mortgage loans back certificates from the collateral pool, according to ratings analysts from DBRS Morningstar.
About 65.9% of the pool is made up of residential investor loans and investor loans account for the other 34.1%, say DBRS analysts. Lenders underwrote the loans to program guidelines for business-purposes, where the lender generally expects the property, or the value of the property, to be the main basis for repayment, analysts said.
PHH Mortgage will service all of the loans in the pool, for an annual fee of 0.20%. For its part, Velocity will act as special servicer on loans that become delinquent for more than 60 days or default. Barclays Capital, Citigroup Global Markets and Performance Trust Capital Partners are all initial note purchases, according to the pre-sale report.
With a closing date slated for August 11, Velocity Commercial 2023-3 will issue a mix of initial exchangeable, and interest-only exchangeable classes of notes that will repay investors through a senior-subordinate structure.
DBRS will assign 'AAA' ratings to the A-S notes; 'AA' to the M1-A notes; 'A' to the class M2-A notes; 'BBB' to the class M3-A notes; 'BB' to the M4-A; and 'B' to the class M5-A. The rating agency did not rate the M6-A notes.
