American Finance Trust, a commercial mortgage real estate investment trust, plans to securitize a $649.5 million loan that is secured by 268 single-tenant properties, according to Standard & Poor's.
The transaction, called BBCMBS Trust 2015-STP, will be rated as a standalone CMBS since it's backed by a single loan. However, it benefits from the variety of tenants in properties that range from retail, office and industrial properties.
Among the top five tenants are the Atlas Cold Storage portfolio secured by nine cold storage industrial facilities, comprising 1,407,166 square feet in four states; American Express Travel Related Services, a subsidiary of American Express Co. and consists of two office buildings; the Walgreens portfolio, which is secured by 18 standalone retail pharmacy locations comprising 253,780 square feet in 10 states; the Koninklijke Ahold portfolio secured by five grocery stores, comprising 327,288 square feet in five states; and the Home Depot portfolio secured by two distribution centers comprising 1,315,200 square feet in two states.
The loan, underwritten by Barclays Bank, Column Financial and UBS Real Estate Securities, has a five-year, fixed-rate term and pays only on interest for the entire period. The trust loan balance has high leverage, relative to other single-borrower transactions analyzed by S&P, with a loan-to-value ratio of 88.5%. However, the LTV ratio based on the appraiser's valuation is only 55.5%. The weighted average remaining lease term is 10.3 years, longer than the loan's term.
Standard & Poor's assigned preliminary AAA ratings to the class A notes, AA- ratings to the class B notes, A- ratings to the class C notes, BBB- ratings to the class D notes, BB- ratings to the class E notes and B+ ratings to the class F notes.