Moody’s rates 6 Classes of CGCMT 2013

The Pak Banker - - 6BUSINESS -

Global rat­ing agency Moody’s as­signed pro­vi­sional rat­ings to six classes of com­mer­cial mort­gage backed se­cu­ri­ties, is­sued by Cit­i­group Com­mer­cial Mort­gage Trust 2013-SMP Com­mer­cial Mort­gage Pass- Through Cer­tifi­cates, Se­ries 2013-SMP.

The Cer­tifi­cates are col­lat­er­al­ized by a sin­gle loan backed by a first lien com­mer­cial mort­gage re­lated to one re­gional mall. The bor­rower un­der­ly­ing the mort­gage is a spe­cial-pur­pose en­tity (SPE), Mac­erich SMP LP.

Moody’s rat­ing ap­proach for se­cu­ri­ties backed by a sin­gle loan com­pares the credit risk in­her­ent in the un­der­ly­ing prop­erty with the credit pro- tec­tion of­fered by the struc­ture. The struc­ture’s credit en­hance­ment is quan­ti­fied by the max­i­mum de­te­ri­o­ra­tion in prop­erty value that the se­cu­ri­ties are able to with­stand un­der var­i­ous stress sce­nar­ios with­out caus­ing an in­crease in the ex­pected loss for var­i­ous rat­ing lev­els. In as­sign­ing sin­gle bor­rower rat­ings, Moody’s also con­sid­ers a range of qual­i­ta­tive is­sues as well as the trans­ac­tion’s struc­tural and le­gal as­pects.

The loan is col­lat­er­al­ized by fee sim­ple and lease­hold in­ter­ests in the 519,593 SF Santa Mon­ica Place re­gional Mall which is lo­cated in Santa Mon­ica, CA. The cen­ter was orig­i­nally con­structed in 1972 as an en­closed mall but was sub­stan­tially re­de­vel­oped to its cur­rent po­si­tion in 2010. The prop­erty is an­chored by Nord­strom and Bloom­ing­dale’s with both an­chors leas­ing their re­spec­tive space from the Bor­rower. How­ever, Nord­strom owns its im­prove­ments dur­ing the term of its lease, with own­er­ship of their im­prove­ments re­vert­ing back to the Bor­rower upon lease ex­pi­ra­tion.

The col­lat­eral also in­cludes two park­ing garages and ap­prox­i­mately 1,800 SF of cer­tain non- mall re­tail space op­er­at­ing un­der long term leases and a rev­enue shar­ing agree­ment be­tween the Bor­rower and The City of Santa Mon­ica that are both sched­uled to ex­pire on De­cem­ber 22, 2077 with no re­newal op­tions.

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