Home Authors Posts by Lauren Parr
Why Hypo Real Estate changed track in its sale of pbb Deutsche Pfandbriefbank is not known. Last month the German government-owned bank (and pbb’s sole shareholder) said it would list real estate lender pbb in July, after inviting bids for the bank by the end of May. According to The Wall Street Journal, bids were expected to value pbb at €1.2bn-1.8bn, with China’s Anbang Insurance Group, and Blackstone, thought to be possible bidders. HRE had always said that financial advisers Citigroup and Deutsche Bank would explore a sale or initial public offering (IPO), but it is unclear whether it chose an IPO because the bids it received were considered too low.
Lenders are adjusting terms to match longer-term work-out strategies for NPL portfolios.
New one-tranche structures avoid punitive CMBS capital charges
Bank of America Merrill Lynch analysts have recommended that regulators look to lessons learned from defaulted CMBS loans to create a set of criteria for future high-quality real estate loans, which could in turn be used to design a high-quality CMBS product. BAML’s Historical drivers of CRE loan performance report identified recurring factors that created defaults and losses among European CMBS loans, including vintage, leverage and property type.
German real estate debt funds, while relatively new on the scene, are starting to build loan books and market relationships. Germany’s first debt fund under German investment law, Deka Realkredit Klassik, launched in 2009, has amassed a €470m portfolio of 24 top-quality loans by buying the senior slice of some loans originated by Deka Bank. A stipulation of the agreement is that Deka Bank must hold at least 50% of Deka Realkredit Klassik’s share in any loan. Germany’s first debt fund under German investment law, Deka Realkredit Klassik, launched in 2009, has amassed a €470m portfolio of 24 top-quality loans by buying the senior slice of some loans originated by Deka Bank. A stipulation of the agreement is that Deka Bank must hold at least 50% of Deka Realkredit Klassik’s share in any loan.
Good income prospects attract family offices to real estate debt, writes Lauren Parr Designed to preserve wealth, family offices are notoriously hard to get information on. But their love of direct property is well known, and now, says the founder of one oil wealth-backed lending business, their real estate debt allocations are also growing. “Family offices generally look at real estate debt as an asset class in its own right,” he says. “Real estate debt allocations have grown among family offices and the larger private banking groups that service them. This is coming through fund allocations, managed accounts, syndications, or, for some larger family offices, directly.”
Royal Bank of Scotland is marketing a securitisation of a loan it made to refinance Kennedy Wilson’s Jupiter portfolio of offices, retail and leisure throughout the UK. The £180m transaction is called Antares 2015-1 and has two classes of floating-rate notes: a £130.65m A class; and a £40.71m B class, rated by DBRS and Fitch Ratings.
Regulators could use lessons learned from defaulted legacy CMBS loans to create a set of criteria for future high quality real estate loans, including CMBS debt. The suggestion is made by Bank of America Merrill Lynch’s European structured finance team after they analysed the historical performance of over 1,000 commercial property loans across 20 European countries totalling €157bn which were securitised in 184 European CMBS transactions between 2000 and 2013.
Logistics investor and developer Prologis has upsized and amended senior debt held by its Prologis European Properties Fund II (PEPF II). A new €200m facility has been arranged by Bank of America Merrill Lynch, Royal Bank of Scotland, JP Morgan and ING Bank, with the latter joining as a new lender.
Fortress is now in pole position to absorb Italian banks’ legacy debt sales, after buying the bad loans unit of one of the country’s top three banks, UniCredit. The US private equity firm also picked up a non-performing loans portfolio from the bank, in one of Italy’s biggest distressed debt deals in several years. In February, a consortium led by the US firm agreed to pay €300m for UniCredit Credit Management Bank (UCCMB), which manages more than €35bn of non-performing loans (not all belonging to UniCredit) and €230m for a separate NPL book with a €2.4bn nominal value.