BAML issues price guidance for Italian logistics and retail CMBS

Bank of America Merrill Lynch has set pricing guidance for its Taurus 2018-1 IT securitisation, sponsored by Blackstone and Partners Group.

The bank will securitise €300 million of debt backed by three loans secured on a portfolio of Italian logistic and retail assets, with a combined value of €359.6 million.

Indicative pricing for the €197 million ‘A’ tranche has been set at 110-115 basis points over Euribor. The CMBS deal will be priced across six tranches on Wednesday 2 May.

The €26 million ‘B’ tranche pricing guidance has been set at 140bps over Euribor, while the €33.1 million ‘C’ and €28.5 million ‘D’ tranches have a pricing range of 225-235bps and 350-370bps, respectively. The €15.5 million ‘E’ tranche has a 460-480bps price range.

The three underlying loans have a combined loan-to-value of 62.5 percent. The largest loan has a value of €215 million and is backed by a portfolio of logistics properties spread over Northern Italy. The 16 properties of the ‘Camelot’ portfolio have a value of €303.9 million and are let to 32 tenants. The loan has a LTV of 72 percent and a debt yield of 10.2 percent.

The second loan, with a debt amount of €34.6 million, is backed by three logistics properties in Northern Italy. The properties of the ‘Logo’ portfolio have a value of €56.1 million and are let to two tenants. The loan LTV is 61.7 percent, with a debt yield of 10.6 percent.

The third loan is secured against six shopping centres in the ‘Bel-Air’ portfolio. The retail assets, valued at €215.8 million, are spread across Italy. The debt amount is €110 million, resulting in an LTV of 51 percent. The debt yield is 11.9 percent.

After a quiet two years, the European CMBS market is gradually returning, with pricing becoming increasingly favourable to lenders. In April, Citi and Morgan Stanley securitised a portion of the debt used to finance Blackstone’s purchase of Finland’s Sponda property platform, with the AAA notes priced at 75bps.