Bank of America Merrill Lynch (BAML) has privately placed a €410m portion of a larger senior loan in an unrated CMBS secured by approximately half of the senior loan secured by Lone Star’s Coeur Défense to four separate accounts.
- Class A: €328m, LTV 50%, WAL 3.64Y, spread 3mE+185bps;
- Class B: €82m, LTV 62%, WAL 3.64Y, spread 3mE+350 bps.
BAML originally financed Lone Star’s acquisition of Coeur Défense in February with €930m whole loan, which was split €805m senior and €125m junior.
AXA Real Estate purchased approximately one-third of the senior loan, which implies around €265.6m, priced at 200 bps over three-month Euribor, while BAWAG also took around €50m at the same price.
AXA and BAWAG also participated in the junior loan, priced at 700bps, taking around €40m each, while LaSalle Investment Management took €30m and a hedge fund took the up to €20m balance.
Subsequent to this syndication effort, BAML was unable to secure sufficient interest for the balance of the senior loan, approximately €490m, owing to the investment bank’s preference for a sale of the remaining senior loan at close to 200 bps.
However, BAML has subsequently managed to distribute the unsold senior debt through the capital markets at a blended margin of 218bps, underscoring the returning price efficiency of CMBS over traditional syndication.
Coeur Défense is valued at €1.29bn, reflecting a 62.0% LTV on the entire senior loan and 71.6% LTV on the whole loan.
The office complex has an occupancy of 73.6% with €94m rent derived from 25 tenants and 27 leases, a weighted average unexpired lease term of 4.86 years and 2.57 years to first break clause.
CoStar News was the first news service to break that Lone Star was set to acquire Coeur Défense back in early February and that BAML was lined up to finance the acquisition with a whole loan.
BAML closed the first CMBS of the year in Europe – and the investment bank’s first sterling-based transaction – with the £211.5m ‘Project Moon’ CMBS.
The transaction, formally named Taurus CMBS UK 2014-1, secures Apollo Global Management’s acquisition of a £347.2m secondary property portfolio acquired from Aviva Commercial Finance in November last year.