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Thursday, 18 January 2018

Year's First CMBS Conduit Launches at Record-Low Spreads

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Commercial Real Estate Direct Staff Report

The year's first CMBS conduit deal has been launched.

The transaction, Benchmark Mortgage Trust, 2018-B1, which is being issued under a Deutsche Bank shelf, includes loans contributed by Deutsche, JPMorgan Chase Bank and Citibank. The $1.17 billion deal marks the first time the three have partnered on a conduit transaction.

Deutsche long had teamed separately with Citi and JPMorgan, but the three never had participated together on a conduit transaction.

Meanwhile, the deal's issuers have provided price guidance of 69 basis point more than swaps for the benchmark class, with the highest possible ratings and a 10-year average life, and 90 bps more than swaps for its junior-AAA class.

If achieved, they would be the tightest spread levels for a CMBS 2.0 transaction, and would best the previous low-spread transaction, Citigroup Commercial Mortgage Trust, 2014-GC23, by 2 bps. That deal priced in July 2014, when the 10-year Treasury was yielding 2.5 percent. Today, the Treasury yields 2.62 percent. They also would compare with a spread of 87 bps more than swaps for the last conduit deal that priced.

The latest transaction has a hybrid risk-retention structure, with Deutsche keeping a 3.47 percent vertical strip and Eightfold Real Estate Capital buying $54.9 million of bonds, or 4.7 percent of the deal, by par value, at a price that would yield 19.77 percent. Eightfold, a Miami investment manager, is buying the bonds through its Eightfold Real Estate Capital...





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Additional Info

  • Syndicate to Realpoint: No
  • Subject: Commercial MBS (CMBS)
  • Private: Yes
Read 509 times Last modified on Friday, 19 January 2018

Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

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