BAML launches €177m pan-European MStar CMBS

Bank of America Merrill Lynch has launched a €176.68m securitisation of  two loans made to MStar Europe secured on industrial portfolios.

The four-and-a-half year Taurus 2015-3 EU DAC CMBS is secured on over 60 assets in three countries, the Netherlands, France and Germany. It is the third CMBS this year to cover multiple jurisdictions in a continuing evolution of the commercial real estate capital markets.

The six-tranche deal matures in April 2020 with an eight year tail period. BAML’s TEIF and Bilux loans to MStar, a joint venture between M7 Real Estate and Starwood Capital, have a combined loan-to-value of 67.7% based on the bank’s original, total facility of around €200m.

The new issuance, with expected DBRS/Moody’s ratings, is comprised as follows:

Class A: €73.8m          AAA/Aaa       28.3% LTV

Class B: €17.5m          AAA/Aa3          35%

Class C: €19.3m          AA/A3              42.4%

Class D: €23.0m          A/Baa3             51.2%

Class E: €21.4m           BBB/Ba2          59.4%

Class F: €21.7m           BB/B3              67.7%

BAML’s €95m, five-year TEIF  loan, for refinancing the Tamar European Industrial Fund, has an LTV of 65% and is secured on 31 assets in the Netherlands, Germany and France. BAML provided the facility in December 2014 and has sold down part of the loan so is securitising the remainder. The portfolio is valued at €126.4m.

The €104m Bilux acquisition loan has an LTV of 70% and is secured on 31 assets in the Netherlands and Germany valued at €148.24m. BAML made the loan January.

Across the two portfolios there are 329 tenants, 125 in TEIF and 204 in Bilux, with occupancy in both portfolios 85%. By value, 39% of the assets are in France, 34% in Germany and 27% in the Netherlands.

The CMBS is the second in recent months to involve a facility to MStar. Deutsche Bank’s €316m DECO 2015 Charlemagne launched in July and included a facility to MStar with a balance of €83.7m. It is secured on 19 light industrial properties also in Germany and the Netherlands.

Both the BAML and Deutsche Bank securitisations were signalled last year.

“BAML are very keen to keep lending to us using CMBS as an exit and we are talking to Deutsche Bank about them backing us again in Germany and the Netherlands,” said Hugh Fraser, director at M7.

“We’re generally very happy with our lenders using CMBS as an exit and both Deutsche Bank and BAML have been very open with us about their intention to do that.”

“We’ve been very supportive because it helps us in terms of enabling them to lend us more. It’s exciting the CMBS market is coming back because it’s a very good thing for us as a borrower,” added Fraser.

This is BAML’s third European CMBS launch this year. In January, it issued its five-year €286.4m Taurus 2015-1 IT multi-borrower securitisation of three Italian loans to Blackstone, Cerberus and Orion Capital Managers. In April, it priced its €455m Taurus 2015-2 DEU, secured by a single loan on IVG Immobilien’s The Squaire property at Frankfurt Airport.