Citigroup Securitizing $1.45B Loan to SL Green


388 Greenwich Street
388 Greenwich Street

Citigroup has received preliminary ratings for the issuance of CMBS secured by a first mortgage loan of $1.45 billion, according to a pre-sales report from Morningstar Credit Rating.

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The floating-rate mortgage loan was recently provided by a group led by Citi to the company’s current landlord at 388-390 Greenwich Street in Tribeca, SL Green Realty, for the purpose of buying out Canadian pension fund Ivanhoe Cambridge’s joint ownership in the buildings, as Mortgage Observer previously reported.  The seven-year mortgage was provided by a lending group that included Bank of China, Wells Fargo, and Barclays, according to a statement from SL Green when the loan closed, last month. 

Citigroup Commercial Mortgage Trust 2014-388G is more than 50 percent AAA rated, according to the pre-sales report, issued Friday.

The proceeds will be used to recapitalize the loan, which has an LTV of 99.7 percent.

The initial term of the interest-only loan is four years, with three one-year extensions options, at a floating rate of Libor plus 1.75 percent, according to the report. Because the loan could be difficult to refinance, the LTV is high and the mortgaged property is leased to one tenant only (Citi) Morningstar analysts view the transaction with some trepidation, according to the report.

“The loan metrics for a transaction of this type … are not particularly strong,” the reported stated. “Nonetheless, this transaction has several key strengths and its credit quality is better than the headline metrics might first suggest.” The location and the borrower’s experience in Class A New York office properties are noted as strengths.

Tenant Citi has an A- Morningstar rating as well as a triple-net lease that extends 10 years past term of the loan.

Representatives for Citi and SL Green declined to comment.