Wells Fargo is marketing a $449 million floating rate CMBS transaction backed by 25 loans.
DBRS has assigned preliminary ratings on the deal, PFP III 2014-1. The capital structure will offer $342.45 million of AAA’-rated class A notes; $28.76 million of AA’-rated class B notes; $33.44 million of A’-rated class C notes; $44.81 million of BBB’-rated class D notes; $21.4 million of BB’-rated class E notes and $18.72 million of B’-rated class F notes.
The pool is comprised of 25 floating-rate mortgage loans with a $535.1-million current trust balance, secured by 26 transitional commercial and multifamily properties. The originator is Prime Group, a private commercial real estate finance company that directly originates CRE mortgage, mezzanine and preferred equity financing.
Sixteen of the loans have a $55.7 million (ranging from $300,000 to $9.5 million per loan) future funding component that is earmarked for property renovations and leasing costs. In addition, each property has a business plan that is expected to increase net cash flow.
The proceeds necessary to fulfill the future funding obligations will be drawn primarily from a committed warehouse line and will be held outside the trust, but will be pari passu with the trust participations, according to the DBRS presale report.
Fifteen loans, representing 68.4% of the pool, have a DBRS Refi DSCR below 1.00x, indicating significant refinance risk. Below are the top ten loans in the pool.