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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.
There was also a US$500m subprime auto deal from Exeter Finance Corp, named EART 2015-1, which priced.
Its AA/AAA rated A class cleared at EDSF plus 110bp, which was at the wide end of its guided 105bp-110bp range, according to syndicate bankers.
But its bottom BB/BB tranche went off wider at interpolated swaps plus 440bp versus talk in the 425bp area.
ACER 2015-1: US$330m equipment deal from Ascentium Equipment. Credit Suisse (str) and BAML.
EART 2015-1: US$500m subprime auto ABS from Exeter Automobile. Wells Fargo (str) and Barclays.
EFF 2015-1: US$750.2m fleet lease ABS from Enterprise. BAML (str), JPMogan, Wells Fargo.
ERL 2015-1: US$405m railcar leasing deal from Element Rail Leasing. Credit Suisse.
GCCT 2015-1: US$525m credit card ABS from RBC Golden Credit Cards. Upsized from $US400m. RBC.
CRART 2015-1: US$350m prime auto ABS from California Republic Bank. Credit Suisse.
FCAT 2015-1: US$280.725m subprime auto ABS from Flagship Credit. Wells Fargo.
JDOT 2015: US$1bn equipment ABS from John Deere. Citi (str0, BAML, and Mitsubishi UFJ.
WLAKE 2015-1: US$395.55m subprime auto ABS from Westlake Auto. Credit Suisse.
VOLT 2015-NPL4: US$667.423m residential non performing loan deal from Vericrest/Caliber Home Loans. Price guidance of 3.625% yield on A1 class, 5.25% on A2. Credit Suisse.
MSC 2015-420: US$245m single asset CMBS on 420 Lexington Avenue. Morgan Stanley.
WFCM 2015-C27: US$927.327m CMBS conduit from Wells Fargo. (Reporting by Joy Wiltermuth; additional reporting by Andrew Park; editing by Shankar Ramakrishnan)