Goldman’s €198m MODA is latest new European CMBS

Goldman Sachs has today launched the third new European CMBS deal this year.

The €198.2m MODA 2014 transaction is the third European CMBS and the second Italian deal this year. It follows DECO-2014 Gondola, Deutsche Bank’s first post-crisis Italian deal which was sold last week, and Bank of America Merrill Lynch’s Taurus UK 2014-1 where the loan is secured on Apollo’s ‘Moon’ portfolio of 132 UK assets. The latter had priced and been sold by the close of today.

MODA is a securitization of two loans made to Blackstone, secured by five outlet malls and shopping centres. Blackstone bought the Franciacorta Outlet Village in southern Italy in September 2013 from Aberdeen Asset Management’s Degi open-ended funds for €126m. Goldman financed the purchase with a €78m loan, called ‘Franc’, and priced around 425 basis points.

In April this year Blackstone acquired three further Degi-Aberdeen assets: Valdichiana Outlet Village in Tuscany, The Borgogioioso shopping centre in Carpi, and another known as Columns in Brindisi, plus a small scheme in Rome called La Scaglia which Blackstone bought from AXA in December. The  total purchase price of the four centres was  €182m and Goldman issued a €120.18m loan called Vanguard to finance them.

The MODA  transaction, which is rated by Fitch and DBRS, features a seven-year tail period between loan maturity in 2019 and legal final maturity of the notes in 2026. Fitch views the Franciacorta asset as the best property in the portfolio, and La Scaglia to be the most challenging.

Deutsche Bank’s €355m Gondola CMBS bonds were four times oversubscribed overall across the book, the bank said, equating to circa €1.45bn of demand. Consequently the pricing tightened to 145 bps for the Class As (up to 31.6% LTV); 175 bps for the class Bs (42.7%); class Cs, 210bps (48.7%), class Ds. 295bps (56.8%) and E 370 (60.5%).

Blackstone was the sponsor on this deal too, with the ‘Mazer’, ‘Gateway’ and ‘Delphine’ loans secured against  logistics assets, shopping centres and offices and a hotel respectively.

One reason for high investor demand is that CMBS offers one of few options to acquire debt in Italy where it is difficult for banks to syndicate.

CBRELS has won the servicing contract for the new MODA transaction, at a very keen rate believed to be less than 1 bp of the outstanding loan balance. It is also facility agent, managing the loan as well as the bonds. With talk of two further CMBS deals in Italy servicers are competing for market share.

CBRELS also undertook both roles on the first Italian CMBS post-crisis, Goldman’s last €363m Gallerie deal sold last November.

Meanwhile, as revealed by Real Estate Capital in May, preparations for the launch of Deutsche Bank and Crédit Agricole CIB’s single-loan securitization of Westfield Stratford are at an advanced stage. The circa £550m agency deal is called DECO Agora and will be rated by DBRS and likely Fitch. Capita has been appointed as servicer.