Citigroup's next commercial mortgage securitization has heavy exposure to split loans that serve as collateral for a number of other transactions.

Just over half (51%) of the loans backing Citigroup Commercial Mortgage Trust 2016-P4 have companion loans backing notes in other deals, including a $70 million loan issued to Tennessee super regional mall Opry Mills (9% of the pool) and a $60 million loan (8.3%) taken out by Hyatt Regency Hunting Beach Resort and Spa in California.

Both loans were part of large-scale refinancing efforts that placed controlling notes backed by the loans parked in other Citigroup CMBS deals. The exception is Opry Mills, which has the controlling note backed by its $375 million in new debt contained in a recent JPMorgan CMBS offering (JPMorgan Chase Commercial Mortgage Securities Trust Series 2016-JP2).

According to ratings agency reports from Fitch Ratings and Kroll Bond Rating Agency, 11 of 14 pari passu loans to other loans are expected to have controlling notes securitized in other transactions.

The new trust is marketing $621 million in bonds backed by $721.2 million in the underlying commercial mortgage pool assets.

Fitch and KBRA have assigned preliminary triple-A ratings to the super senior Class A notes tranches in the deal. Those tranches include a $24.6 million in Class A-1 notes, $65.4 million in Class A-2 notes, $170 million in Class A-3 notes, $201.3 million in Class A-4 notes and $43.4 million in a series of A-AB notes. Moody's Investors Service is also expected to issue an Aaa rating on the super senior notes, according to a Citigroup registration filing Monday.

The Class A notes are supported by 30% credit enhancement.

The securitization includes 45 loans for 64 properties, with an average loan size of $16 million. Only two of the loans permit future subordinate indebtedness, which KBRA noted was the second lowest among the CMBS conduits rated by the agency over the past six months.

Fitch noted that the transaction has higher average leverage of 111.1% LTV than other recent multiborrower CMBS transactions. The pool will amortize 10.8% annually, which is in line with other recent CMBS deal averages.

Loans for retail properties make up the largest segment of the pool (38.3%), followed by hotel/lodging properties at 19.3%. Hotel properties are considered more volatile assets in a securitization, due to the fluctuating daily room rates.

The loans were originated by Citigroup Global Markets Realty Corp., Principal Commercial Capital, Starwood Mortgage Funding and Barclays.

The transaction was underwritten by Citigroup Global Markets, Barclays and Drexel Hamilton.

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