BofA Prices $460M CMBS Issue
Bank of America (BAC) last week priced the second new-issue commercial mortgage-backed security (CMBS) of 2009, according to industry commentary by Deutsche Bank Securities. The $460m transaction, secured by 44 office and industrial properties in Florida, could not take advantage of the new-issue CMBS Term Asset-Backed Securities Loan Facility (TALF) because of the 7-year loan term, Deutsche Bank said. The collateral pool contained non-standard components including cash flow from the leasing of fiber-optic cables, land and billboards along a 351-mile corridor running from Jacksonville to Miami. "[W]e view the transaction as another important step toward the revival of the CMBS market," after another new issuance from Developers Diversified Realty (DDR) started off new-issue CMBS TALF, Deutsche analysts said. "The strong investor appetite for both new transactions is certainly encouraging." The pricing of both new issuances offers "a glimmer of hope" that capital will be more available in 2010, according to Lisa Pendergast, a managing director at Jefferies & Co. and the Commercial Mortgage Securities Association's (CMSA) president-elect. "These transactions provided potential issuers with real evidence that there is strong appetite for conservatively-underwritten, low-levered transactions, and thus more deals are sure to follow," she tells HousingWire for an upcoming magazine issue. Write to Diana Golobay.