Bank of America Merrill Lynch has launched a €445m (£320m) CMBS of a single loan against IVG’s 1.5m sq ft The Squaire at Frankfurt airport.
The underlying loan was issued by BAML for €470m over five years in January this year. BAML will retain 5% of the loan as part of its risk retention requirement.
The CMBS, called Taurus 2015-2 DEU, is across six tranches, with expected ratings from Standard & Poor’s and Moody’s of AAA for the €153m A-class tranche down to a B rating for the €39.8m F-class notes, with an LTV of 72.7%.
The bond has an expected maturity date of January 2020.
At the time the loan was issued The Squaire was 85% occupied and produced gross rent of €40m pa. Its average lease length was 10.3 years and tenants included KPMG, Hilton and Lufthansa.
The Squaire was valued in January at €644m and contains a mix of 57% offices, 3% retail and a hotel.
IVG had looked at selling The Squaire prior to the refinance but opted for a deal with BAML after it was unable to achieve its target sale price.
In November 2014, Deutsche Bank completed a €1.5bn refinancing of the majority of IVG’s on-balance-sheet real estate business and later securitised €680m of that loan.
The BAML CMBS is one of two deals issued this week. RBS also issued the Antares CMBS (p36). Both issuers have taken an economic interest in the underlying loan instead of the bond itself.
