The securities are backed by 422 fixed-rate commercial mortgage loans which were originated or acquired by First Union National Bank and Lehman Brothers. The properties are located in 38 states, with the greatest concentration in Florida (14.2%), New York (11.1%), Texas (10.6%), California (9.4%) and Georgia (5%).
"We are extremely pleased by the b investor demand in this securitization," said Brian Simpson, managing director of First Union Corporation's Structured Products and Real Estate Group. "This transaction benefits customers as it replenishes capital and allows us to make additional commercial loans to meet our customers' financing needs."
Apartment buildings and townhomes represent 30.5 percent of the securitized loan pool, while retail properties represent 30.4 percent. Credit lease and office properties each make up about 10.5 percent; hotels and hospitality, 8.7 percent; and healthcare 4 percent. Five other property types round out the pool. First Union Commercial Mortgage Servicing, a unit of First Union National Bank, will act as master servicer of the loans.
"This deal provides investors with b geographic and property type diversity," said Larry Brown, managing director of First Union's Commercial Real Estate Finance Group. "We are excited to be part of the industry's largest securitization and look forward to continued growth in the commercial mortgage-backed securities (CMBS) market."
Earlier this year, First Union Capital Markets Corp. and Lehman Brothers completed a $1.3 billion CMBS offering.
In 1996, First Union National Bank ranked as the nation's leading commercial bank originator of securitized commercial mortgage loans. First Union originates commercial mortgages for securitization throughout its East Coast franchise, as well as through regional offices in Chicago, Houston and Irvine, Calif.
First Union has developed a nationally recognized securitization capability, specializing in all types of asset classes. Earlier this year, First Union Capital Markets Corp. completed the first public securitization of Community Reinvestment Act (CRA) loans.
First Union Capital Markets Corp., the investment banking subsidiary of First Union Corporation, provides a full range of investment banking products and services, including asset-backed finance, public finance, syndicated loans, merger and acquisition advisory, private finance, equity underwriting and investment grade and high-yield debt finance.
First Union has grown its capital markets business substantially over the last three years. First Union's Capital Markets Group reported 1997 fee income through Sept. 30 of $531 million, up from $464 million for the full year of 1996 and $265 million in 1995.
Charlotte-based First Union Corporation is the nation's sixth-largest bank holding company with assets of $144 billion as of Sept. 30, 1997. The company serves approximately 12 million customers throughout the East Coast and nation.
First Union Capital Markets Group is a trade name for First Union Capital Markets Corp., an NASD registered broker-dealer, and the capital markets activities of First Union National Bank. First Union Capital Markets Corp. is an affiliate of First Union National Bank.
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