Goldman launches £646m UK logistics CMBS

Goldman Sachs has launched Logistics UK 2015, a £646m CMBS of a loan secured on Blackstone’s Logicor UK assets.

The transaction securitises 95% of a single Goldman £680m refinancing loan to Logicor, secured by 42 logistics assets located mainly in the Midlands and Yorkshire.

The total market value of the assets is £986m reflecting a loan-to-value of 69% which Fitch noted is “relatively high compared to some other bullet loans in recent European CMBS”. The loan maturity is August 2018, extendable by two one-year periods.

Fitch, which is expected to rate the deal alongside Moody’s, noted that the interest coverage ration cash trap test (1.2x), and delveraging requirements if properties are sold, are both low, reflecting Blackstone’s “bargaining power”.

The new issuance, with expected Fitch ratings, is composed of six tranches as follows:

Class A: £312m – AAA at 33% LTV

Class B: £67.5m – AA at 40.6% LTV

Class C: £67.5m – A at 47.8% LTV

Class D: £60.8m – BBB at 54.3% LTV

Class E: £76.0m – BB- at 62.4% LTV

Class F: £61.8m – B at 69.0% LTV

In April, Goldman Sachs won the mandate to provide Blackstone’s Logicor UK’s portfolio with a £680m five-year refinancing facility at a margin of just over 200bps.

The most subordinated tranche was reported today by Costar as not being offered. In June, Real Estate Capital reported that debt investor LaSalle Investment Management had taken the most junior tranche of the loan.

In its presale note, Fitch Ratings described the 11.8 m sq ft portfolio as ‘near prime’ with many of the properties let at top rents in strong distribution locations. Major tenants include Amazon, Travis Perkins and Asos.

The transaction is also noteworthy as Wells Fargo’s London office is the servicer and special servicer. Wells has not been a participant in any of the post-crisis CMBS 2.0 European deals up until now. The bank’s UK team largely comprises the former Eurohypo team, which was active pre-crisis in CMBS.

Blackstone has been looking to reduce Logicor’s financing costs and could sell the whole pan-European platform towards the end of 2015 or early 2016.