Wells Fargo brings $1B CMBS to market
Wells Fargo (WFC) is planning to price a $1.09 billion commercial mortgage-backed securitization made up of 75 fixed-rate loans secured by 98 properties, primarily devoted to retail. Wells Fargo will act as master servicer on the deal. The sellers are listed as the Royal Bank of Scotland (RBS), Basis Real Estate Capital II, C-III Commercial Mortgage, General Electric Capital (GEJ) and Wells Fargo. Deutsche Bank (DB) will serve as the deal's trustee. Moody's Investor Service rated seven of the 13 tranches AAA, four of which carry a credit enhancement of 30%. According to the deal, 46% of the loans are for retail business in Texas, owned by the massive real estate investment trust Simon Property Group (SPG). In the pre-sale report, Moody's states a core strength of the deal is its overall diverse geographical area. "Approximately 77.2% of the pool balance is represented by properties located in major markets," the report states. "Properties situated in major markets tend to exhibit more cash flow and capitalization rate stability over time in contrast to assets located in tertiary markets." However, the credit ratings agency said there are some concerns about loan-to-value rations. Twenty-four loans, nearly 40% of the pool balance, appraised at an LTV greater than 100%. This includes six loans (6.7% of the pool balance) with an LTV greater than 110%. Write to Jacob Gaffney. Follow him on Twitter @jacobgaffney.