Blackstone's large US$1.8bn CMBS tops list of priced deals

Thu Feb 26, 2015 6:00pm EST
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By Joy Wiltermuth

NEW YORK, Feb 26 (IFR) - The Blackstone Group's US$1.8bn CMBS refinancing of Motel 6, a low-cost lodging chain it bought three years ago, was the biggest structured finance deal to price on Thursday, bankers and investors said.

Demand helped the issuer to tighten the top three classes 5bp-10bp from talk earlier in the week, even though the trade nearly cashed out Blackstone's entire US$626m equity stake in the company.

Presale reports showed that the new financing returned US$600m in equity to Blackstone, a point that two investors said made it less attractive than the initial US$1bn CMBS, which helped finance Blackstone's 2012 acquisition of Motel 6 from Accor.

"Is it a concern? We have conflicted thoughts," one analyst said. "We don't like to see big cash outs. But again, that's one reason why we will look at the sponsor."

Further down in credit, investors felt they wanted a bit more spread from Blackstone, particularly on the Triple B minus and Double B minus classes, which widened by roughly 15bp before they landed at Swaps plus 290bp and S+390bp, respectively.

The only Triple A class on offer, an A-2A2 bond, landed at S+95bp, while the Double A minus landed at S+165bp; the Single A minus at S+200bp; and the B-/B at S+425bp.

In primary ABS, Ascentium Capital also priced a US$330m equipment receivables trade called ACER 2015-1. So did, Element Rail's US$405m leasing deal dubbed ERL 2015-1.

The Royal Bank of Canada also increased a credit card deal, called GCCT 2015-1, to US$525m from US$400m.   Continued...