Royal Bank of Scotland has delayed its £170m five-year Antares 2015-1 CMBS because of poor market response.
The CMBS 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 last week but a lack of interest because of similar products in the market had put pressure on its pricing.
Antares’s launch followed Bank of America Merrill Lynch’s release of the €455m Taurus 2015-2 DEU CMBS two weeks ago and Deutsche Bank’s £175m DECO 2015-HARP CMBS launch last month. Also this year, there have been two further CMBS launches both secured on Italian assets.
RBS decided to postpone the Antares transaction until more favourable market conditions prevailed. There is no set date for relaunch.
Antares had two classes of floating-rate notes: a £130.6m, class A note and a £39.4m class B. The Class A notes, rated A by both DBRS and Fitch, sit at a loan to value of 44.3% and were guided to price at 185bps over 3 month Libor. The loan-to-value of the Class B notes, rated BBB-, is 57.6% and they were forecast to price at 300bps over.
The notes had an expected maturity of December 2019 and a legal final maturity of December 2022. The 17 properties in the Jupiter portfolio have a remaining average loan term to next break of 7.3 years. The office and retail properties are located 56% in Scotland and 44% in England.
Last August the £750m Westfield Stratford City Finance CMBS was pulled 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.
The deal subsequently returned to the market successfully a month later.