North America MBS House: Bank of America
Consistent leaders
Real estate financing continued to improve in 2025 but faced challenges on several fronts – lofty home prices, elevated interest rates and uncertainty about office demand. Bank of America drew on its expertise and leveraged its clout to provide securitisation for residential and commercial property lenders and is IFR’s North America MBS House of the Year.
Bank of America’s mortgage-backed franchise enjoyed a strong 2025 in the face of a US property market that continued to contend with challenges such as stubbornly elevated borrowing costs, expensive home valuations and hybrid working in the office sector.
“For us, it has been an incredibly diverse year across all sectors,” said Leland Bunch, Bank of America’s head of capital markets and banking for the US real estate structured finance group.
The bank made notable strides in the CMBS space and captured second place on LSEG’s league table for the IFR Awards period, leaping up from fifth in 2024.
The move was driven by its patience and nimbleness to arrange large deals, especially for its long-term clients such as Unibail-Rodamco-Westfield.
In July, as lead-left manager, BofA priced the US$925m five-year single-asset single-borrower CENT Trust 2025-CITY for the global shopping mall operator that refinanced a high-end shopping centre in Los Angeles.
The US$878m Triple A senior tranche clinched a spread of Treasuries plus 115bp, the tightest for a five-year fixed-rate mall CMBS issue since 2019.
“The pricing was spectacular,” Bunch said. The annual interest savings of about US$25m for the Paris-based company relative to the asset's financing in 2023 was “a huge win”.
The 2023 deal’s US$781.28m Triple A senior note priced at SOFR plus 262bp, significantly wider than the senior tranche in the 2025 refinancing.
“It just shows how we stick with our borrowers and our clients,” Bunch said.
Beyond the realm of longstanding CMBS sectors, BofA has set its sights on data centres, whose presence in the market is growing rapidly as big tech pours hundreds of billions of dollars into constructing facilities to develop generative AI.
“Digital infrastructure is making a significant push here," Bunch said. BofA was a joint bookrunner on Blackstone’s four QTS data centre-related offerings in 2025, which collectively raised US$8.3bn.
Elsewhere in CMBS, BofA and Morgan Stanley dusted off a joint issuance vehicle that had been dormant for seven years to take advantage of a revival in conduit financing. These deals securitise smaller mortgages and pieces of larger loans that do not make it in a SASB format, which has been a more popular financing vehicle in the past few years.
Bunch said this was another source of liquidity and helped the bank maintain deal momentum
Many bank conduit programmes ground to a halt after stricter risk-retention regulations went into effect in 2016, making programmes sponsored by several institutions too costly.
In March, the two banks placed an US$834.14m five-year conduit offering issued by Morgan Stanley Bank of America Trust 2025-5C1 to strong investor reception. They have since issued two more trades from the reactivated shelf.
At the end of the IFR Awards period, BofA was on pace to finish fifth in the LSEG league table for residential mortgage securitisations in 2025, matching its ranking in 2024.
The bank demonstrated its structuring skills by securing both longer-term financing for Pimco and Annaly on retained interest on their mortgage deals. It worked with Fitch to formulate trades rated BBB– for the senior class.
In March, it placed Pimco’s first securitisation of retained interests, the US$323.7m Bravo Trust 2025-SR1. Four months later, it arranged Annaly’s own entry, the US$348.4m OBX 2025-SR1 Trust.
These offerings diversified Pimco and Annaly away from their reliance on bank repo lines.
“It’s an important tool for those issuers to manage their financing in the capacity on their repo and to manage liquidity,” said Raul Delgadillo, BofA's head of mortgage finance.
Because of its long-term RMBS leadership, BofA helped revive a somewhat forgotten collateral type – the hybrid adjustable-rate loan. In September, Redwood mandated BofA as structuring lead to place a US$347.4m trade backed by newly originated hybrid ARMs which are gaining appeal to home buyers seeking to minimise their monthly payments.
2025 underscored BofA's drive to deliver solutions for its mortgage clients.
“We think we bring something that’s value-add versus all our other peers,” said Matthew McQueen, the bank’s head of global FICC micro products. “When they need to do creative things in the capital markets, we’re going to be that first call.”