Wells Fargo and RBS priced a $1.4 billion conduit, kicking off what is slated to be a busy September for commercial mortgage bonds.
Analysts at JP Morgan stated in a report published Friday that the new issue calendar for this month could see more than $15 billion placed with investors, more than double the $6.8 billion monthly average of the last six months.
The super senior, 10-year class A5 notes issued under WFRBS Commercial Mortgage Trust 2014-C22, priced at 84 basis points over swaps, according to market reports. They are rated triple-A by Fitch Ratings, Kroll Bond Raitings and Moody's Investors Service.
Further down the curve, the AA-’/ AA-’/ Aa3’, 10-year class B notes priced at swaps plus 145 basis points over swaps. The A-’/’A-’/ A3’, 10-year, class C notes priced at swaps plus 190 basis points.
Spreads on the deal show a bit of retracement from the August selloff, according to analysts. For example, in mid August Deutsche Bank sold the 10-year, super senior, triple-A rated notes from COMM 2014-CCRE19 at swaps plus 90 basis points.
JP Morgan said that although new issue CMBS spreads were modestly tighter across the capital structure over the first week of September, they “have only partially retraced their July/August selloff”.
Office properties represent the highest concentration of the WFRBS Commercial Mortgage Trust 2014-C22 pool at 26.3%; multifamily properties represent 16.8%. Office properties have a higher likelihood of default in Fitch’s analysis while multifamily properties have a lower likelihood of default. Fitch also stated in the presale report that the overall collateral quality of the pool is in line with the majority of other recent fixed-rate deals.