Alejandrina Catalano
Deutsche Asset & Wealth Management’s senior debt fund is a new player in a very competitive league. Senior lenders are a dime a dozen on its home turf, Germany, and that domestic market is the fund’s “top priority”.
Closed with €500m in January and with more capital in the pipeline, the fund is squarely in the safe, conservative space: targeting loan-to-value ratios of 60%, on three- to 10-year terms, in the four main asset classes, and fixed or floating rate.
Bondholders have consented to a restructuring of £1.5bn of debt secured by a 35 –strong portfolio of General Healthcare Group's UK private hospitals. This brings to a close nearly two years of negotiations among borrowers, bondholders and lenders to refinance its loans.
The new structure involves group of junior bondholders injecting £175m and taking control of the assets. Senior lenders will be partially repaid; amoritisation is increased and the interest rate on senior and one junior tranche is being increased. A long-dated interest rate swap – whose mark-to-market value is currently around £675m – is being partially crystallised and replaced by new hedging arrangements.
Natale Giostra, Gatehouse Bank's head of real estate financing has resigned "to pursue other opportunities".
WestImmo, the German property bank which is being bought by Aareal, has posted a profit after tax of €64.1m for 2014, up 27% from the previous year.
"We are very pleased with our results”, said Claus-Jürgen Cohausz, chairman of WestImmo's management board.. “The bank has emerged as a focused pfandbrief bank with a low risk profile.”
Returns to senior lending on commercial real estate fell to 3.6% from 4.1% over the year to Q1 2015 , according to CBRE's latest UK Debt Prospects.
The main culprit in reducing gross returns was a 33bps fall in margins, allied to a 10bps drop in interest rates.
US debt investors Oak Hill Advisors and York Capital Management have provided a €55m short term debt facility to AIM-listed Globalworth Real Estate Investments, to help finance its acquisition of two office buildings in Bucharest.
Islamic banking is one of the fastest-growing parts of the world’s financial system, accounting for an estimated $1.6trn of assets in 2014. However, in Europe and North America, it is still at an embryonic stage.
According to the EU, the UK is the most advanced Islamic finance market in the west and a “key destination for foreign, Shariah-compliant institutions”.
Irish bank Permanent TSB is selling €1.5bn of non-core largely commercial real estate loans to Havbell, a new vehicle funded by Deutsche Bank and
funds affiliated with Apollo Global Management.
An estimated €100bn of European loan portfolios will trade in 2015 and up to half of this could be real estate, according to PwC.
Its annual market survey estimates that investors have €70bn of equity to spend, which combined with leverage, could fund significantly more deals this year. PWC expects portfolios with a face value of around €90-100bn to trade in 2015.
Higher provisions for bad loans have hit Sareb, more than doubling the net losses to €585m in 2014.
Spain's bad bank has been operating for two years, dealing with €50.8bn of distressed real estate related loans and assets. For 2014, it has written down €719m of toxic loans which are unlikely to be recovered. The bulk of these, €628m were originally unsecured credits and the borrowers are insolvent. Spain's central bank has required Sareb to increase and accellerate their write down.
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