The successful placing and pricing of Taurus 2013 (GMF 1), the securitisation of the €1.1bn GAGFAH-sponsored Woba Dresden loan, has boosted Europe’s ailing CMBS sector.
The issuance refinanced a loan with the same name that was previously joint securitised in Windermere IX and Deco 2007 E5 (Deco 14). As such, the loan and the property collateral were well known to the European CMBS investor base.
According to Barclays analysts: “The deal execution was very successful, as seen in pricing and oversubscription levels. The deal priced substantially inside Florentia, a German multi-family CMBS that was launched in 2011.
The pricing of Taurus 2013 (GMF 1) also triggered a positive price transaction in the secondary markets: the restructured GRAND mezzanine and junior notes quotes increased by up to 1.5 points and are now quoted near par.
The analysts said the placement of Taurus 2013 (GMF 1), particularly the wide investor participation, bodes very well for future German multi-family CMBS issuance.
“Excluding the DACs, the weighted average margin of Taurus 2013 (GMF1) is 140bp. At a 140-200bp margin, German multi-family CMBS is likely to be a competitive funding source for large loans and good sponsors, in our view. As a result, we think German multi-family sponsors that have not historically participated in the CMBS market could also be considering future CMBS funding, next to bank funding.”
As all European CMBS transactions that were placed since the 2007-08 financial crisis, Taurus 2013 (GMF 1) contains some structural innovations, compared with legacy transactions, and marks the road to a standardised European CMBS 2.0 transaction structure.
According to Barclays: “In our view, notable new features of Taurus 2013 (GMF 1) include the CMBS notes’ prepayment protection, the DAC class (excess spread extraction mechanism) and the intended relatively larger protection of classes A and B at the detriment of classes C and below.”
As appears currently common in European CMBS, some structural details were subject to changes, very likely based on investor feedback, between publication of the first term sheet and launch.
Taurus 2013 (GMF 1) is backed by a single €1.1bn facility split into three loans granted to Woba Dresden, a subsidiary of GAGFAH S.A.
The loan is secured by 37,000 residential units, 6,000 parking lots and 860 commercial units that are mostly located in Dresden, with some in Zwickau.
There is no senior ranking debt, nor are there subordinated loans on top of the securitised loan. The portfolio was valued in April 2013 at €1.8bn, with an LTV of 60.3%.
The current net rent of the portfolio is €125.5m, which generated a cash net operating income before tax of €85.9m in 2012, according to the offering circular.
