Deutsche Bank is exploring the securitisation of high-yielding loans after widening credit spreads scuppered its pipeline of prime deals.
The bank, which in June securitised its £300m loan on Chiswick Park in the first European CMBS in four years, is eyeing the possibility of “riskier but higher margin” deals.
One source said: “Instead of looking at prime assets, people are asking whether they can do something with higher yielding loans, which would actually make money and cater to the flood of secondary assets, which is expected to hit the market.”
Talks with potential investors to gauge appetite for the bonds come as the bank pushes back plans to launch two more prime securitisations this autumn following market volatility in August.
It had been working on the securitisation of three UK loans totalling £450m – which may now be syndicated – as well as one German multi-family transaction.
Deutsche Bank’s real estate division has recently been re-organised following the recent departure of a number of its most senior European commercial real estate bankers.
This includes Cyril Courbage, managing director and European head of real estate, who resigned last month. He is to be replaced by Gad Caspy who is currently a managing director in Deutsche Bank’s New York-based global structured credit division.
Heath Forusz, the former head of EMEA commercial real estate capital markets, who led the Chiswick Park deal, also left the bank in August.
Meanwhile, investment bank UBS has made Romano Paredes redundant only one year after it poached him from Morgan Stanley as part of a series of senior appointments as it geared up to make a push into securitised property lending.
Peredes was an executive director in charge of real estate capital markets – a team that advises on the restructuring and refinancing of existing property debt, loan origination and securitisation.
UBS also recently lost Don Belanger, its head of European real estate capital markets, who returned to Deutsche Bank as a managing director in its real estate finance division.
Deutsche Bank and UBS declined to comment.
