Banks resurrect £750m stalled Westfield Stratford CMBS

Deutsche Bank and Crédit Agricole have brought back to the market the £750m CMBS, secured against Westfield’s Stratford City regional shopping centre in east London.

The initial proposed deal was pulled in August because neither the sponsor or the advising banks were proposing to retain 5% of the notes of the issuance as is usually required under European capital requirement legislation. As a result some investors were unable to gain approval from their credit committees to buy notes as internal regulatory requirements dictated that they could only invest where this was the case.

Deutsche Bank and Crédit Agricole argued that this was not necessary as the loan was not a true securitisation as it was a single borrower, single tranche and single asset deal. The banks have maintained this stance and are not retaining any of the notes and have seemingly gone back to the market in the confidence that investors will have been able to adjust their internal controls and buy into the securitisation.

The CMBS is likely to be rated by Fitch and DBRS. Pricing is expected on 6 October and settlement on the week commencing 13 October. It has a low LTV of 38.4%, with the centre valued at £1.95bn. The deal will have an expected maturity in November 2019 and a final legal maturity of November 2024. With such a prime asset and low leverage, the previous securitisation was expected to be priced below 100 basis points.

Stratford City is comprised of 1.9m sq ft of retail by the Olympic Park and is 98.9% occupied. It has an average lease term to first break of 6.6 years and an average unexpired lease term of 12.6 years.

The news follows Deutsche Bank yesterday confirming its pricing for its €250.04m Dutch 2014-Tulip CMBS