AIG and Goldman Sachs head five-lender Gagfah €2bn refinancing

AIG and Goldman Sachs head a five-strong club of lenders alongside three German pfandbrief banks to refinance more than €1bn of Gagfah’s maturing €2.06bn securitised debt, CoStar News understands, as part of a wider refinancing strategy to diversify the sources and maturity profile of its debt.

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Gagfah, which is controlled by Fortress Investment Group through a series of investment funds, announced on Friday in its annual results that the listed German residential property company had, by mid-March, signed term sheets for five of the six pools.

The six collateral pools have been sub-divided into two refinancing tracks: one of the pools comprises AIG and Goldman Sachs’ loans as well as the circa €700m fresh CMBS, and the second pool comprises a three-strong €476m pfandbrief bank club refinancing.

In its maiden bilateral European real estate loan, the recovering US insurance giant AIG is to underwrite a €350m senior loan over 10 years at around a 55% LTV – implying a collateral market value of €636m – and priced at near 250 basis points over three-month EURIBOR, CoStar News understands.

Goldman Sachs is expected to underwrite a five-year €250m senior loan – although the final size could still change – with a syndication exit strategy likely for the lion’s share of the debt. Margins over five years are expected to come inside the 250 bps for 10-year money, reflecting competitive pricing for German multi-family CMBS debt.

The final three sub-pools are to be refinanced with a €476m senior loan from HypoVerinsbank, the German subsidiary of Italian bank Uni-Credit – Gagfah’s joint refinancing adviser – Deutsche Pfandbriefbank and Helaba, CoStar News understands.

Each of the three German pfandbrief banks are understood to be taking an equal €158.6m share.

The sixth pool, Gagfah re-confirmed last Friday, is earmarked for a fresh CMBS at slightly more than €700m.

Goldman Sachs and Uni-Credit, as joint refinancing arrangers and advisers, are expected to be involved in the new securitisation, for which it is not yet known if the new issuance will be a true sale – like the anticipated CMBS from Gagfah’s €1.06bn Woba loan refinancing with Bank of America Merrill Lynch (BAML) – or an agency-style capital markets deal.

In respect of the anticipated upcoming €700m German multi-family CMBS, Gagfah wrote in its annual results published on Friday: “Due to the nature of this planned transaction, no term sheet has been signed for this refinancing tranche, but based on the assessment by the leading investment bank and the demand for German residential assets in general, we believe it is highly probable that this transaction will be completed successfully.”

The outstanding €2.06bn German Residential Funding CMBS loan, co-issued by Deutsche Bank and Goldman Sachs in summer 2006, matures on 15 August.

At origination, the portfolio was spread throughout Germany with around 60% of the assets across in 20 major cities with the five largest cities: Berlin, Hamburg, Köln, Bielefeld, Frankfurt and Essen. Sales have reduced the portfolio size to 76,455-strong and the annual rent to €259.77m, according to the latest quarterly investor report.

All parties declined to comment.

About CoStar News

Finance Editor, CoStar News
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