FINANCE: Bank of America Merrill Lynch has launched a €445m (£320m) CMBS of a single loan against IVG’s The Squaire at Frankfurt airport.
The underlying loan was issued by BAML for €470m over five years in January this year. BAML will be retaining 5% of the loan as part of its risk-retention requirement.
The CMBS, known as Taurus 2015-2 DEU, is across six tranches with expected ratings from S&P and Moody’s of AAA for the €153m A class tranche at 25% LTV, down to a B rating for the €39.8m F class note with an LTV of 72.7%.
At the time of the loan, The Squaire was 85% occupied and produced gross rent of €40m with an average of 10.3-year leases to tenants including KPMG, Hilton and Lufthansa. The bond has an expected maturity date of January 2020.
The Squaire was valued in January at €644m and contains a mix of 57% offices 3% retail, a hotel and other assets.
IVG had originally looked at selling The Squaire when it sought to refinance a large part of its portfolio in recent months, but abandonded the plan once the finance was in place.
In November 2014 Deutsche Bank completed a €1.5bn refinancing of a large part of their on-balance-sheet real estate business and later securitised €680m of that facility.
This is the second CMBS issued in as many days and, like the RBS Antares CMBS, is based upon a single underlying loan.
Both CMBS issuers have also taken an economic interest in the underlying loan instead of the bond itself.
