New CMBS Issue in the Works, Backed By Retail

Investors fearful that the CMBS market would dry up can breath a sigh of relief. JPMorgan Chase is reportedly at work on a $1.2 billion issuance that will be backed largely by retail assets. Approximately half of all mortgages in the pool will be on retail properties, with hotels and office buildings making up the remainder of the loans, according to The Wall Street Journal.

To whet investors' appetite for the new CMBS issue, however, JPMorgan Chase will adapt risk containment measures, including offering buyers a 30 percent credit enhancement and selling the senior notes in the pool through a public offering. As of September 8, the terms on CMBS notes were trending this way, according to Commercial Mortgage Alert.