Two deals totalling £850m launched this month include a record cmbs issue by Anglo-Irish Bank Corp
The UK securitisation market has picked up after a summer lull. Two commercial mortgage-backed deals, totalling £850m, were launched this month.
Anglo-Irish Bank Corp’s £385.5m issue, lead-managed by Merrill Lynch, was the UK’s largest ever multi-loan commercial mortage securitisation. The notes are backed by 130 mortgages secured on a portfolio of 337 commercial properties and over 1,500 tenants in Britain. They are mainly secondary properties, and the average loan size was £2.5m.
The loans were part of AIBC’s existing £1.8bn book, rather than having been originated with securitisation in mind. “AIBC has very strong relationships with its borrowers, and that meant it has a low default level. This was a selling point with investors,” notes Nassar Hussain, vice president of debt real estate at Merrill Lynch.
“What people liked was its diversity – there is no reliance on one building, there’s sectoral spread, and the geographic spread is very good,” said John Rowan, AIBC’s head of UKcommercial property lending.
The second securitisation was £462.2m of cmbs issued by Morgan Stanley’s European Loan Conduit No 4. This deal involved one large loan financing six UK shopping centres.
The loan/securitisation was structured as a package deal for the 50:50 joint venture between the UK property company MEPC and Australian shopping centre specialist Westfield, set up to buy the centres from MEPC. The centres include Castle Court in Belfast and Royal Victoria Place in Tunbridge Wells.
Morgan Stanley’s head of property lending Lynn MacClean said: “The package of the transaction was attractive to the client – the loan didn’t have to be syndicated, and securitisation was attractive on the overall pricing.”
