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Goldman Sachs launches the sixth post-crisis Italian CMBS

Goldman Sachs is marketing the securitisation of a single €191.5m loan it made for Apollo Global Management’s REITALY fund to purchase a portfolio containing 25 Italian assets. The €182.5m, five-tranche transaction includes a 10.4% debt yield and matures in May 2020 with the legal final maturity in May 2027.

Goldman Sachs is marketing the securitisation of a single €191.5m loan it made for Apollo Global Management to purchase a portfolio of 25 Italian retail assets.

The €182.5m, five-tranche REITALY Finance transaction is the sixth Italian CMBS to be launched since the securitisation market began to recover in the last couple of years.

It follows two others arranged by Goldman, in 2013 and 2014 (Gallerie 2013 and Moda 2014), one last year from Deutsche Bank (DECO 14 – Gondola) and two this year, from Banca IM/Cairn Capital and Bank of America Merrill Lynch.

The latest deal is to be rated by Standard & Poor’s and Fitch, and matures in May 2020 with the legal final maturity in May 2027.

The new issuance, with the expected Fitch ratings, is comprised as follows:

Class A                  €109.3m               Asf                         39.3% LTV

Class X1 and X2   €0.3                       NR

Class B                  €33.3                     BBBsf                    51.3% LTV

Class C                  €12.4                     BBB-sf                   55.8% LTV

Class D                  €17.7m                  BBsf                       62.1% LTV

Class E                   €9.3m                   BB-sf                     65.5% LTV

Total                      €182.3m

The portfolio comprises five large retail assets, each with a cinema, five cash-and-carry properties, three retail galleries, five retail warehouse and seven shops. They are located across Italy and have a combined market value of €292.3m.

Goldman Sachs provided the original loan to Apollo’s Italian REITALY fund which is managed by AXA Real Estate Investment Managers and which bought the assets, originally for €290m of equity, from Olinda Fondo Shops, a listed fund managed by Prelios.

Goldman Sachs will retain a net economic interest of 5% in the underlying loan.

In its pre-sale report, Fitch said UCI Cinemas Group provides 21% of the total rental income and the portfolio includes its Milan flagship, the Pioltello IMAX complex. Almost half the contracted rental income expires by loan maturity in 2020.

The five-year loan is subject to a 20% amortisation target by 2018 and 30% by 2019, due to be met by asset sales.

Zenith is the deal’s master servicer, with primary and special servicing delegated to CBRE Loan Servicing.

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