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Goldman Sachs postpones €182.5m REITALY CMBS

Goldman Sachs has postponed its €182.5m REITALY CMBS, the securitisation of a loan to Apollo Global Management for a portfolio of 25 Italian retail assets. The five-tranche deal was due to be priced this week in another sign of the recovery in the commercial mortgage securitisation market.

Goldman Sachs has postponed its €182.5m REITALY CMBS, the securitisation of a loan to Apollo Global Management for a portfolio of 25 Italian retail assets.

The five-tranche Italian deal was due to be priced this week.

Goldman Sachs logo to useAlthough Euromarket turmoil sparked by the IMF quitting the bailout negotiations with Greece had not helped, market observers said there were features of the deal that had diminished its attraction: the nature of the assets, and the prepayment protection provisions.

It is the second CMBS launch to be postponed in the past two months.

Royal Bank of Scotland delayed its £170m five-year Antares 2015-1 CMBS in April because of poor market response. Antares is the securitisation of a single loan to refinance Kennedy Wilson’s Jupiter portfolio of 17 UK office and retail assets.

RBS released the price guidance but a lack of interest put pressure on its pricing. There is still no date for relaunch.

REITALY was to be the sixth Italian CMBS to be launched post-crisis. 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.

Goldman Sachs provided the original €191.5m 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.

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.

In its pre-sale report, ratings agency 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.

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