May 20, 2024

BMO Mortgage Trust raises $737.6 million in CMBS


Christinne Muschi/Bloomberg

BMO Mortgage Trust 2023-C7 has issued a CMBS conduit transaction for 31 loans secured by 84 commercial properties with an aggregate principal balance of $737.6 million. The deal closed on December 19, 2023.

BMO Commercial Mortgage Securities was the depositor, according to Fitch Ratings. Lenders contributing to the trust include Bank of Montreal, Citi Real Estate Funding, UBS AG, Starwood Mortgage Capital, and KeyBank National Association. 

The master servicer is Midland Loan Services, a division of PNC Bank, National Association, and the special servicer is KeyBank.

According to Kroll Bond Rating Agency, the collateral properties are located in 47 metropolitan service areas, of which the three largest are Chicago (14.9%), New York (11.4%), and Baltimore (8.1%). The pool has exposure to all major property types, with four types representing more than 10% of the pool balance: retail (39.8%), multifamily (19.3%), industrial (13.3%) and office exposure (12.2%), KBRA said.

The pool has lower leverage compared to recent multi-borrower transactions rated by Fitch Ratings. Its loan-to-value ratio is lower, while net cash flow debt yield is higher than average for both year-to-date (YTD) 2023 and 2022, Fitch said. Additionally, the pool is less concentrated than those transactions rated by Fitch in the same period.

Two loans representing 11.9% of the pool received an investment-grade credit opinion from Fitch. Woodfield Mall (9.2% of the pool) received a standalone credit opinion of BBB and 60 Hudson Street (2.7%) received a standalone credit opinion of AAA. 

Moody’s Investor Service said notable concerns of the transaction include collateral quality; pool diversity profile; amortization profile; market composition; single tenant share; high weighted average loan coupon, and asset-level legal considerations.

Fitch has assigned final ratings of AAA to the class A-1, A-2, A-5, A-S, A-SB and X-A notes, AA- to B and X-B, A- to C, BBB to D and X-D, BBB- to E and X-E, BB- to F and X-F, and B- to G-RR. 

Moody’s has assigned final ratings of Aaa to the class A-1, A-2, A-5, A-SB, and X-A notes, Aa2 to the A-S notes, and A2 to the WMA notes, which relate to the Woodfield Mall.

KBRA has assigned provisional ratings of AAA to A-1, A-2, A-SB, A-5, A-S, X-A and X-B, AA- to B, BBB+ to D and X-D, BBB- to E and X-E, BB+ to F and X-F, and B+ to G-RR.

X-A, X-B, X-D, X-E and X-F are interest-only certificates, KBRA says.

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