Trepp Analyzes the First CMBS Deal Compliant with Risk Retention

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Trepp has released new research on the first CMBS deal to price with risk retention rules, highlighting the new structure, bond pricing, and the loan collateral.

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Now that the market has had time to analyze this historical offering, many can safely say that the pricing levels and credit quality of this deal bode well for future CMBS deals.

Trepp, LLC, the leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, has published new research on the first CMBS deal to be securitized with a risk retention structure in compliance with the regulation. The report can be found here: http://info.trepp.com/first-risk-retention-cmbs-deal-august-2016-press-release.

Trepp has published research that highlights the key characteristics of the first CMBS deal to price in compliance with risk retention rules. With risk retention officially beginning in December 2016, CMBS lenders will have to include certain criteria in deals they issue. Based on the deal prospectus, Trepp took a closer look and offered their analysis on the deal’s structure, bond pricing, and loan collateral.

“CMBS issuers were waiting anxiously for the first deal like this to hit the market,” said Trepp Senior Managing Director, Manus Clancy. “Now that the market has had time to analyze and digest this historical offering, many can safely say that the pricing levels and credit quality of this deal bode well for future CMBS deals that will have to comply to risk retention rules.”

The first CMBS deal to feature a risk retention structure compliant with Dodd-Frank guidelines priced in August. The $870.6 million deal was sponsored by Wells Fargo, Bank of America and Morgan Stanley. In compliance with risk retention guidelines, the three issuers combined to retain 5% of the fair value of each tranche in proportion to the bank’s relative contribution to the collateral portfolio.

40 CMBS loans serve as collateral for the deal. Those 40 notes are backed by 46 properties, with 31.6% of the deal’s balance represented by office loans. The three largest loans in the deal are an $80 million piece of financing for a Las Vegas retail center, an $80 million loan for a pharmaceutical headquarters in Boston, and $71.4 million note that backs a Stamford, Connecticut office. In terms of geographical composition, 70% of the loans are secured by properties situated in the 25 largest MSAs.

For additional details, such as breakdowns for the deal’s pricing and collateral, download Trepp’s research on the first CMBS deal compliant with risk retention: http://info.trepp.com/first-risk-retention-cmbs-deal-august-2016-press-release. For daily CMBS commentary, follow @TreppWire on Twitter.

About Trepp
Trepp, LLC, founded in 1979, is a leading provider of data, analytics, and technology solutions to the global securities and investment management industries. Trepp specifically serves three key sectors: structured finance, commercial real estate, and banking to help market participants meet their objectives for surveillance, credit risk management, and investment performance. Trusted by the industry for the accuracy of its proprietary data, Trepp provides clients sophisticated, comprehensive models and analytics. Trepp is wholly owned by dmg Information, the business information division of Daily Mail and General Trust (DMGT). For more information, visit http://www.Trepp.com.

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Sean Barrie
Trepp
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