Pricing for the relaunched £750m Stratford City CMBS is expected to be tighter than when it was first marketed in August.
Demand for Deutsche Bank’s and Credit Agricole’s investment-grade single-tranche securitisation – and a lack of other product – could result in the banks beating initial pricing.
On 6 August, prior to shelving the transactions, the lenders offered initial pricing at 87-90bps over three-month LIBOR. The new deal is expected to price by the middle of next week, following an investor roadshow.
The CMBS comes back to the market after clarification was sought over the application of the regulatory requirement for either the banks or the sponsor to retain a 5% stake in the structure.
Because the agency-style CMBS was a single tranche it was thought to fall outside the regulation as it did not qualify as a securitisation. The banks have now clarified that the issuer, Westfield Stratford City Finance, is of the opinion that the transaction is not a “securitisation” for the purposes of Article 405 of the CRR and Article 17 of the AIFMD.
This means Westfield will not be retaining a 5% stake in the structure.
The CMBS has an expected maturity of November 2019, with a legal final in November 2024. It reflects a 38.4% LTV, valuing the 1.9m sq ft Westfield Stratford City shopping centre at £1.95bn, according to a CBRE valuation in May 2014.
Deutsche Bank this week released official pricing for its Dutch CMBS. Its €250m (£195m) DECO 2014-TULIP has a senior tranche of €170m that has a coupon of 98bps above three-month Euribor.
bridget.o’connell@estatesgazette.com
