A CMBS backed by 76 mortgages that are in turn secured by 91 properties is coming to market, according to presales by Fitch Ratings and Kroll Bond Rating Agency.

The underwriters are Morgan Stanley; Merrill Lynch, Pierce, Fenner & Smith, CIBC World Markets Corp. and Drexel Hamilton, according to Fitch's presale.

The deal, MSBAM 2015-C22, consists of multiple tranches. Among the larger ones are a $250 million A-3 tranche rated AAA by Fitch and KBRA, and a $318.8 million A-4 tranche also rated AAA by both agencies. All the A tranches are cushioned by 30% credit enhancement. On offer are subinvestment-grade tranches as well, including a $13.8 million F tranche rated B+ by KBRA and B- by Fitch, and an $18 million G tranche rated B- by KBRA and unrated by Fitch. Credit enhancement is 4.875% and 3.25%, respectively. All the tranches have a final legal maturity of April 2048.

As gauged by Fitch, the in-trust loan-to-value ratio — that is, leaving aside claims on the underlying properties that are not being securitized in this deal — is 112.6%, appreciably higher than the 106.2% average for 2014 and 101.6% for 2013. KBRA's figure is 105.9%, which exceeds the 102.4% average for the 20 CMBS conduits the agency has rated in the last six months.

The higher the leverage, the greater the chance of defaults and losses down the road.

Weighted average life of the underlying loans is 9.1 years, and the WAL coupon is 4.27%.

The size of the loans vary between $1.9 million and $100 million for the largest mortgage in the pool, which is secured by an air rights parcel located above the land underlying 300 South Riverside Plaza, a 1.1 million square foot office building located in downtown Chicago.

Four originators sold the underlying mortgages to the issuing trust: Morgan Stanley Mortgage Capital Holdings (22 loans, 44.5%), Bank of America (29 loans, 27.1%), CIBC (17 loans, 19.9%) and Starwood Mortgage Funding III (8 loans, 8.5%).

The pooled properties are located in 27 states and Washington, D.C. They are well spread out, with the state holding the most properties, New York, accounting for 15.3%.

Morgan Stanley Mortgage Capital Holdings, the seller of the largest loan, acquired the air rights as well as the noncollateral class-A building at 300 South Riverside in 2010 for $212 million, or $212 per square foot. An affiliate of the seller retained the building itself when the collateral air rights were sold the securitization trust.

The loan is being repaid through a ground rent paid by the owners of the 22-story building, which hold a lease that expires 2114. Chicago's Union Station is adjacent to the property.

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