Different pricing levels in single-borrower commercial mortgage-backed securities deals last week are evidence that “investors have increasingly begun to differentiate” between them, analysts at Bank of America Merrill Lynch say.
SCGT 2013-SRP1’s three-year, Class A notes priced at 140 basis over swaps and the three-year, triple-A, AJ notes priced at 195 basis points. The double-A, 2.9-year notes priced at 250 basis points; the 2.9-year, triple-B notes priced at 466 basis points; and the double-B, 2.9 year notes priced at 475 basis points.
Hilton Worldwide priced its close to $2.7 billion MBS deal led by JPMorgan and Deutsche Bank on Nov. 22.
Hilton USA Trust 2013-HLT triple-A rated five-year, Class A notes priced at 125 basis points. The double-A minus, five-year, Class B notes priced at 185 basis points; the single-A minus, five-year, Class C notes priced at 220 basis; the triple-B minus, five-year, Class D notes priced at 290 basis points; and the double-B rated, five-year, Class E notes priced at 390 basis points.
The 1.9-year floating rate, triple-A notes priced at 150 basis points; the 1.9-year triple-B minus notes priced at 275 basis points; and the 1.9-year, double B notes priced at 375 basis points.
JPMorgan, Deutsche Bank, Morgan Stanley and Wells Fargo last week priced the longer-dated, 6.95-year, triple-A notes from its deal
Further down the curve, the notes are also structured with longer maturities and are priced within Starwood’s deal. The double-A rated, Class B with a weighted average life of 6.95-years, priced at 145 basis points over swaps and the 6.95-years single-A rated, Class C notes priced at 170 basis points.
Spreads on the deal “were tighter across the capital structure than they were for the other single borrower transactions that recently priced,” said B of A Merrill Lynch.
The 1.9-year floating rate, triple-A notes priced at 150 basis point; the 1.9-year triple-B minus notes priced at 275 basis points; and the 1.9-year, double B notes priced at 375 basis points.