

Bank of America Merrill Lynch (BAML) has released initial price thoughts (IPTs) for its latest European CMBS – Taurus 2016-2 DEU – with the AAA notes indicatively priced at 120-130 basis points over three-month Euribor.
The underlying loan was provided by BAML to Canada’s Dream Global REIT to finance a portfolio of mainly German offices including properties leased to Deutsche Post and Deutsche Postbank. The underlying portfolio has been valued at €493.1 million.
Indicative pricing across the six tranches is as follows:
- Class A (€140.1 million, 29.9 percent LTV): 120-130 basis points over three month Euribor.
- Class B (€37 million, 37.8 percent LTV): low 200s bps.
- Class C (€27.2 million, 43.6 percent LTV): Around 300 bps.
- Class D (€25.635 million, 49.1 percent LTV): Around 400 bps.
Launch and pricing is expected this week.
The sponsor, Dream Global REIT, is an open-ended real estate investment trust which is invested in Germany and Austria and is a subsidiary of Toronto-based Dream Office REIT, formerly known as Dundee REIT. Last December, Dream Global REIT announced that it had agreed a €244.1 million five-year loan with BAML at a margin of 225 basis points over three-month LIBOR to refinance its initial properties in the German market.
Taurus 2016-2 DEU has an expected maturity date of January 2021 and a 72 month tail period, with legal final maturity in January 2027. The deal will be listed on the Irish Stock Exchange.
BAML previously sold the first CMBS of 2016, the €317.05 million Taurus 2016-1 DEU, in March. That deal was the securitisation of a €335 million senior loan which financed Blackstone’s €470 million purchase of the Kingfisher portfolio of mainly German retail properties from Stenham Property last May.
The Taurus 2016-1 DEU AAA notes priced tighter than the bank’s initial price thoughts, with the €141.6 million Class A selling at 130 bps, tighter than the indicative 140-150 bps. The Class E notes sold at a 5 percent discount and the Class F tranche sold at a 6.8 percent discount.
Other lenders said that the 130 bps pricing was an encouraging sign for the European CMBS market which had been at a virtual stand-still since last autumn. Last September, AAA tranche pricing had widened to 165 bps, from as low as 90 bps during the second quarter of 2015.