Goldman Sachs and Citigroup priced a $1.4-billion CMBS transaction March 23; with the crisis in Japan and turmoil in Libya a significant widening in CMBS spreads occurred. With capital markets recovering some lost ground during the week, the transaction was able to clear the high end of price guidance.
Similar to other recent CMBS issues, the issue has a heavy concentration of loans on retail properties, which comprise 60% of its collateral pool. The transaction has been divided into ten principal paying classes and one interest-only class rated by Fitch and DBRS. The deal’s four AAA classes have an 18.25% subordination level, at the upper end of 15%-18.25% subordination levels for recent multi-borrower deals. Its unrated class, a balance of $38.5 million, comprises part of the deal’s B-piece, which was acquired by Rialto Capital. Wells Fargo is the deal’s master servicer and Midland Loan Services is the deal’s special servicer.
The $81-million class A1 CMBS with a 2.5-year average life wound up pricing at an 80 basis point (bp) spread. The $399-million class A2 CMBS with a 4.8-year average life went out the door at 125 bp over swaps, and the $128-million class of 7.2-year paper went for 140 bp. The class A4 CMBS with a 9.7-year average life was substantially oversubscribed by investors at 125 bp over swaps.