Second largest US CMBS conduit deal of 2015 carries high LTV

Fitch Ratings has issued final ratings on Deutsche Bank Securities’ $1.4bn COMM 2015-DC1 securitization, one of the largest CMBS deals completed so far this year. The rating agency awarded its triple-A rating to the deal's roughly $1.1bn top tranche, also noting that the securitization carries higher leverage than recent fixed-rate multi-borrower transactions.

Fitch Ratings has issued final ratings for Deutsche Bank Securities’ $1.4bn COMM 2015-DC1, indicating in a report that the deal — the second largest multi-borrower CMBS transaction of the year — carries notably high leverage.

The rating agency, which awarded its triple-A rating to the deal’s roughly $1.1bn top tranche, noted that the loan pool’s 112.4% loan-to-value is well above the 106.2% average from 2014.

The top conduit deal so far in 2015 was Deutsche Bank Securities’ COMM 2015-LC19, which just edged out COMM 2015-DC1 with a $1.423bn balance; but it carried a lower LTV of 109%.

Moody’s Investor Service previously noted in a pre-sale report that the 118.1% LTV it calculated was not only higher than the 2014 average but also higher than the 2007 conduit/fusion transaction average of 110.6%.

“Excluding one loan… the [remaining] trust loan balance of $1.377bn represents a Moody’s LTV ratio of 119.2%, which is higher than average conduit component leverage observed in CMBS 2.0,” the rating agency said.

Natixis, German American Capital Corporation, Jefferies LoanCore and UBS Real Estate Securities contributed loans to the trust. Natixis said it securitized $274.8m of the loans, contributing 14 of the 67.

The 10-year fixed-rate loans include a $40m loan on the land at 100 West 57th Street in Manhattan and a $32m loan on office buildings at 760 and 800 Westchester in Rye Brook, New York.