Deutsche Bank and Credit Agricole CIB’s STRAT 2014 pricing guidance at 85 bps

Deutsche Bank and Credit Agricole CIB issued pricing guidance on Friday for its re-launched £750m commercial mortgage floating rate bond, STRAT 2014, at between 85 and 90 basis points for the single-tranche investment grade issuance. 

Handelsraum Deutsche BankSTRAT 2014, an agency deal funding the refinancing the 1.9m sq ft Westfield Stratford City shopping centre, is expected to price before mid week. 

Westfield Stratford City was valued at £1.95bn in May by CBRE, reflecting at 38.4% LTV.  The shopping centre has a current annual net operating income of £92.8m and a 98.9% occupancy.

The pricing guidance, if achieved, would represent a marginal improvement on the initial pricing guidance of 87 to 90 bps offered back on 6 August, at the first time of offering. 

However, Deutsche Bank has a recent track record of beating its initial pricing guidance – including with last week’s DECO 2014 Tulip – and expectations are that STRAT 2014 could in fact settle sub 80 bps.

Of course, the agency securitisation is very lowly-geared and has limited use as comparable for current loan pricing – securitisation or bilateral, beyond that of a sub 40% LTV super prime London possibly trophy asset.

The metric which will be keenly followed is the over subscription ratio, that is, how much more than £750m could Deutsche Bank and Credit Agricole CIB have sold at the pricing achieved.

This figure offers an insight into the depth of the investment market for AAA-grade commercial mortgage bonds.

Next up in the CMBS line for Deutsche Bank following STRAT 2014 is the possible securitisation of a €750m loan which refinanced IVG Immobilien with a €1.5bn new facility, according to market sources including Debtwire who first broke the story. 

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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