Wells Fargo priced $927 million of commercial mortgage securities via its Wells Fargo Commercial Mortgage Trust 2015-C27 series, according to a pricing document.
The issuer paid swaps plus 87 basis points for the 10-year, super-senior bond, near the average of the last three deals that priced in February. DBRS, Kroll Bond Rating Agency and Moody’s Investor Service rated the senior bonds. By comparison Deutsche Bank’s priced the 10-year benchmark bonds from COMM 2015-DC1 at swaps plus 88 basis points last Tuesday.
Analysts at Barclays said in a securitization report this week that the spread tightening for conduit CMBS was helped by the manageable level of issuance over February. However a heavier primary calendar is likely to change this dynamic in March. March’s new issue calendar may deliver about $8.9 billion of single-asset/single-borrower deals and $5.8 billion of conduit transactions.
Further down the curve, Wells Fargo’s WFCMT 2015-C27 priced the 10-year B tranche at swaps plus 155 basis points. Moody’s rated the notes A1’, two notches lower than the AA’ ratings assigned by DBRS and Kroll.
The 10-year C notes - rated A’/ A- by DBRS and Kroll - priced at swaps plus 230 basis points. Moody’s did not rate the class C notes.
Barclays stated in its report that, based on the pricing spreads of the mezzanine bonds in the latest deals, investors are “ascribing more importance to which ratings agency is rating specific tranches...as some ratings agencies continue to be dropped from mezzanine tranches."
For example at the single-A level, no tranche from the last three deals had a Moody’s ratings, but those with Fitch Ratings priced in a range from swaps plus 205 basis points to swaps plus 208 basis points, compared with swaps plus 230 basis points for the tranche without a Fitch rating.
The Wells Fargo deal securitizes a total of 95 fixed-rate loans secured by 124 properties located in 30 states, with two states representing more than 10.0% of the pool balance: California (16.6%) and Florida (13.0%). The pool has exposure to all the major property types, with retail, lodging, office, self-storage and multifamily representing the top five.
The largest loan in the pool is a $62.5 million loan secured by Westfield Palm Desert, a 979,108 sf regional mall located in Palm Desert, California, approximately 80 miles northeast of San Diego. The loan represents 6% of the collateral pool.