Moody's Assigns Triple-A to Goldman's $788.5m CMBS Offering
Moody's Investors Service assigned its triple-A rating to the largest tranches of Goldman Sachs' (GS) $788.5m offering of commercial mortgage-backed securities. Analysts said the rating reflects the quality of the collateral, the levels of credit enhancement by the subordinate tranches, and the "structural and legal integrity of the transaction." The rating applies only to the credit risks for the transaction, which was privately placed in a negotiated deal. The largest tranche of the transaction, which is expected to close this month, is $410.7m maturing in nearly 10 years yielding 135 bps above the benchmark swap rate, according to a HousingWire source who requested anonymity. The double A class priced at plus-135 with 4.592% coupon, the source said. The second-largest tranche, at $232m, priced at plus-125 over swap with a 3.679% coupon, according to the source. Moody's assigned its Aa2 rating to the B class, which came at plus-190 with a 5.148% coupon. The C class was rated A2 and priced at plus 265 with a coupon of 5.635%, while the Baa3 rated D class priced at plus 400 and carried a 6.149% coupon. There are 23 fixed-rate loans backed by 48 commercial properties bundled in the securities. More than 78% of the loans are collateralized by retail properties, including 47.2% of regional mall property, 12.8% of anchored retail and 18.2% of single-tenant retail, according to analysts. Barney's flagship store on Madison Ave. in Manhattan is the largest property in the pool, accounting for 12.7%. One mall outside Minneapolis and another 33 miles north of Detroit each account for 10.5% of the securitized pool of mortgages. Moody's said credit strengths of the Series 2010-C1 commercial mortgage pass-through certificates include a loan-to-value ratio of 70.8% and debt-service coverage of 1.74 times. Goldman Sachs Mortgage led the sale with Citigroup Global Markets Realty and Starwood Property Mortgage as co-managers. The transaction is expected to close in August, according to Moody's. The deal comes to market as delinquencies on existing CMBS loans continue to rise. The delinquent unpaid balance on these loans passed $60bn in June, more than double the amount from a year ago, according to analytics firm Realpoint. Write to Jason Philyaw. The author holds no relevant investments.