Large conduit CMBS on tap from JPMorgan-investor

NEW YORK May 4 (Reuters) - JPMorgan Chase & Co is expected in coming weeks to sell the largest new commercial mortgage-backed security since issuance in the CMBS market began to recover late last year.

The bank has cobbled together loans to create an $840 million bond for sale to both senior investors and an equity "B-piece" buyer, according to one investor.

The deal, first reported in Commercial Mortgage Alert, would be just the second so-called conduit issue to hit the recovering market that provides credit for office, retail and apartment buildings.

JPMorgan declined to comment.

Last month, RBS priced a $309.7 million CMBS backed by multiple loans, the first sale of its kind in nearly two years and a benchmark for the recovering CMBS market.

The conduit deal was seen as a key gauge of risk appetite for securities tied to the troubled commercial real estate market, where billions of dollars in maturing loans are in need of refinancing through 2012. A lack of credit for properties whose value and revenue have fallen has exacerbated defaults.

The RBS sale followed three single-borrower CMBS deals that were sold in December 2009.

(Reporting by Al Yoon and Nancy Leinfuss; Editing by Dan Grebler)