Commercial Mortgage Alert reports that Goldman Sachs and Citigroup have priced an $875.5-million CMBS transaction backed by commercial mortgages they recently originated. GS Mortgage Securities Trust, 2010-C2 will likely be the last multi-borrower transaction for 2010. The issue has a heavy concentration of loans on retail properties and office buildings, which comprise 38.8% and 33.8% of its collateral pool, respectively. The transaction has been divided into eight principal paying classes and two interest-only classes rated by Fitch and Moody’s. The deal’s three AAA classes have a 17.50% subordination level compared with a 15%-18.25% subordination level for recent multi-borrower deals. Its unrated class, with a balance of $28.5 million, comprises part of the deal’s B-piece, which was acquired by BlackRock Financial. Wells Fargo is the deal’s Master Servicer and Midland Loan Services is the deal’s special servicer.
According to Commercial Mortgage Alert, the $876.5-million offering’s two senior classes wound up pricing at spreads that were 5-10 basis points (bp) wider than price talk. A $347-million class with a 4.9-year average life went out the door at 130 bp over swaps, up from price talk of 120-125 bp. A $376.1-million class of 9.8-year paper went for 140 bp, up from 130-135 bp.
Goldman and Citi found stronger demand for the three investment-grade classes with lower ratings, all with 10-year terms. The double-A bonds printed at 195 bp, down from price talk of 210-220 bp, and the single-As priced at 265 bp, down from 280-290 bp. The triple-B-minus class priced at the low end of talk, at 380 bp.
Timing evidently was also partly to blame for the soft demand because the deal came to market as many on the buy side were already on the sidelines, wrapping up their books for the year.