Christine Mussi/Bloomberg
BMO Mortgage Trust 2023-C7 issued a CMBS conduit transaction for 31 loans secured by 84 commercial properties with an aggregate principal balance of $737.6 million. The transaction closed on December 19, 2023.
The depositor is BMO Commercial Mortgage Securities Inc. Lenders providing funding to the trust include Bank of Montreal, City Real Estate Funding Inc., UBS AG, Starwood Mortgage Capital Inc. and KeyBank National Association Inc., according to Fitch Ratings.
The master servicer is Midland Loan Services, a division of PNC Bank, National Association, and the special servicer is KeyBank.
The collateral properties are located in 47 metropolitan areas, with Chicago (14.9%), New York (11.4%) and Baltimore (8.1%) being the top three, according to Kroll Bond Rating Agency. The pool has exposure to all major property types, with four types making up more than 10% of the pool balance: retail (39.8%), multifamily (19.3%), industrial (13.3%) and office (12.2%), KBRA said.
The pool has lower leverage compared to recent multi-borrower transactions rated by Fitch Ratings. Loan-to-value ratios are low and net cash flow debt yields are higher than average for both year-to-date (YTD) 2023 and 2022, Fitch said. Additionally, the pool is less concentrated than transactions Fitch has rated during the same period.
Two loans, representing 11.9% of the pool, received investment grade credit opinions from Fitch: Woodfield Mall (9.2% of the pool) received a BBB independent credit opinion, and 60 Hudson Street (2.7%) received a AAA independent credit opinion.
Moody's Investors Service cited collateral quality, pool diversity profile, amortization profile, market composition, single-tenant share, high weighted average loan coupon and asset-level legal considerations as notable concerns for the transaction.
Fitch assigned final ratings of AAA, AA- to B and XB, A- to C, BBB to D and XD, BBB- to E and XE, BB- to F and XF and B- to G-RR to the A-1, A-2, A-5, AS, A-SB and XA class notes.
Moody's assigned final ratings of Aaa to the classes A-1, A-2, A-5, A-SB and XA bonds related to Woodfield Mall, Aa2 to the AS bonds and A2 to the WMA bonds.
KBRA assigned provisional ratings of AAA for A-1, A-2, A-SB, A-5, AS, XA and XB, B for AA-, BBB+ for D and XD, BBB- for E and XE, BB+ for F and XF, and B+ for G-RR.
According to KBRA, XA, XB, XD, XE and XF are interest-only certificates.