Deutsche Bank launches the €250.04m DECO Tulip CMBS

Deutsche Bank has this afternoon launched the €250.04m DECO 2014 TULIP CMBS, in the first multi-loan securitisation comprised of different sponsors and the first backed by Netherlands real estate since the global financial crisis.

Handelsraum Deutsche BankThe DECO 2014 TULIP CMBS is comprised of two senior loans – the €125.49m Windmolen Loan, secured by three transactions of sponsor PPF Real Estate Holding, and the €124.5m Orange loan, secured by a joint venture between Mount Kellett Capital Management and Sectie 5 Management B.V.

The two loans are secured by 20 retail and office properties, with 291 tenants, in the Netherlands with a combined market value of €438.85m.

The capital structure of DECO 2014 TULIP is as follows:

  • Class A: €170.00m, 21.2% debt yield (DY), 38.9% LTV, 4.0 WAL
  • Class B: €20.00m, 19.0% DY, 43.4% LTV, 4.2% WAL       
  • Class C: €20.00m, 17.2% DY, 48.0% LTV, 4.2% WAL       
  • Class D: €20.00m, 15.7% DY, 52.6% LTV, 4.2 WAL
  • Class E: €20.04m, 14.4% DY, 57.2% LTV, 4.2 WAL

Standard & Poor’s and DBRS are expected to rate DECO 2014 TULIP but are yet to confirm final ratings.   Expected maturity is 27 July-2019 and legal final maturity is 27 July 2024.

Deutsche Bank AG, London Branch will retain on an ongoing basis a material net economic interest of at least 5% of each class of notes.

The transaction is expected to close in October.

Deutsche Bank underwrote the original €130.15m five-year– priced at 500 bps over three-month Euribor – on 23 July 2013 to finance PPF Real Estate Holding’s acquisition of a portfolio of nine office and retail properties across the Netherlands.

The cut off loan balance is now €125.49m and the updated valuation of the portfolio is €233.1m, according to a CBRE July 2104 valuation, which puts the LTV at 53.8%. 

The total GRI as of the cut-off date from the Project Windmolen portfolio is €23.29m and the occupancy is 81.1%. The overall weighted average lease term (WALT) to first break is 5.7 years.

Deutsche Bank underwrote the original five-year €125m Orange loan to facilitate the acquisition of a portfolio of 11 shopping centers across the Netherlands by a 95:5 joint venture between Mount Kellett Capital Management and Sectie 5 Management.

Mount Kellett and Sectie 5 acquired the portfolio for €176.0m, financed with Deutsche Bank’s €125.0m senior loan – priced at 310 bps over three-month Euribor and which funded on 14 May 2014.

However, the most recent re-valuation, by JLL in May 2014, shows the market value of the portfolio has risen to €205.74m, which puts the loan’s LTV 60.7%

The total GRI from the Project Orange portfolio is €19.1m and the occupancy is 92.8% as of the cut-off date.  The overall WALT to first break is 3.4 years.

The overall occupancy of the portfolios is 85.8% and the WALT is 4.6 years to first break and 4.8 years to expiry.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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