A group of four major banks is sponsoring another commercial mortgage-backed securities (CMBS) transaction from the Benchmark platform, in a transaction in which commercial properties make up about a third of the collateral pool .
Thirty-eight commercial mortgages secured by 50 properties with an aggregate principal balance of $ 952.3 million provide security for the agreement. Of that amount, $ 794.9 million in certificates will be offered, according to S&P Global Ratings.
According to S&P, the pooled trust has a debt service coverage ratio of 2.24x. Citi Real Estate Funding Inc., German American Capital Corp., Goldman Sachs Mortgage Co. and JPMorgan Chase Bank NA are the sellers and sponsors of mortgage loans.
Sixteen commercial buildings are in the collateral pool, which gives it an exposure of 29.6%. This level is significantly higher than the average of 23.2% shown in the comparison set, according to the rating agency Kroll Bond, one of three rating agencies supposed to assign ratings to ratings.
Benchmark will issue 21 categories of certificates, 13 of which give entitlement to payment of principal and interest. Six classes will only receive interest, one class will receive excess interest and another will receive residual interest, according to KBRA.
Although retail commercial real estate (CRE) properties have been besieged by challenges such as e-commerce competition and a drop in brick and mortar sales resulting from the COVID-19 pandemic, nine of the properties in retail sales are anchored or fully occupied by a need. retailer based like a grocery store or pharmacy, according to KBRA.
As for accommodation, another CRE sector that had been impacted by the COVID-19 pandemic, the pool only had an exposure of 2.6%, slightly below the average of 2.8% for the comparison set. KBRA takes an unfavorable view of the accommodation industry as it depends on room rates per night and tends to have more volatile cash flows than other types of property. Only two loans make up the housing exhibition.
A large majority of the properties in the loan portfolio, around 78.5%, are located in primary markets, which typically have larger and more diverse economies than secondary and tertiary markets. This exceeds the 53.0% percentage in the comparison set, according to KBRA.
The deal is geographically diverse, with properties spread across 50 states with California representing the largest concentration at 51.9%. Massachusetts follows with 19.8%, New York with 17.8% and the District of Columbia with 6.8%.
KBRA and S&P plan to assign âAAAâ ratings to classes A-1 through A-5. Ratings vary across the rest of the capital structure.