Berlin Hyp refinanced €656.6m of Deutsche Annington’s maturing GRAND CMBS in a five-year loan, as part of a wider €786.6m fresh debt package completing 70% of the German residential property company’s €1bn refinancing target for the year.
While Deutsche Annington did not disclose financing terms for the Berlin Hyp loan, pfandbrief-funded banks tend to price prime German multi-family residential real estate competitively on a relative basis, at between 195 and 220 basis points over three-month EURIBOR.
In addition, Deutsche Annington historic average LTVs are at circa 60%, which would imply that the portfolio securing Berlin Hyp’s €656.6m five-year senior loan is just under €1.1bn.
Berlin Hyp plans to syndicate part of its €656.6m loan through its affiliated savings banks.
Deutsche Annington said €715m of the total €786.6m will be used for a partial repayment of the GRAND CMBS, reflecting 71.5% of its year one amortisation target.
Property sales over the course of the year will yield further cash for further debt repayment, Deutsche Annington said.
The €786.6m partial CMBS refinancing will reduce the outstanding €3.83bn GRAND balance to €3.1bn at April’s interest payment date (IPD), repaying bondholders including BayernLB, ING Investment Management, JPMorgan, Landesbank Baden-Württemberg, PIMCO and Standard Life Investments.
Terra Firma injected €504m in fresh equity at the end of last year, which is to be floated in the Spring by private equity owner Terra Firma.
The security pool for the partial refinancing comprises more than 27,000 residential units in 100 different locations in the Ruhr area and in the areas of Cologne, Munich and Augsburg.
Jan Bettink, chairman of Berlin Hyp, said: “The magnitude and financing structure made the funding for all project participants to a very complex task. But thanks to high professionalism and constructiveness much transparency for all partners of this conclusion was possible – something we are very pleased.
“In addition, the DAIG signed with other financial partners two credit agreements in the amount of €130m. These transactions open for refinancing goals DAIG alternative sources of funding outside the traditional banks.
“We appreciate the cooperation of Berlin Hyp and our other funding partners. These agreements, [together with] the entrepreneurial strength of DAIG and the deep trust in the capital markets confirms our company’s future,” said Dr. A. Stefan Kirsten, CFO of Deutsche Annington.
“The capital market has now assured that the refinancing agreement to GRAND is implemented reliably in practice in the shortest time.”
Later this year Deutsche Annington is expected to explore the feasibility of bringing a ‘mini GRAND’ CMBS to market to meet, in part or whole, the €700m refinancing target for 2014, CoStar News understands.
CoStar News wrote an analysis of the GRAND refinancing proposal here.