JPMorgan and Lone Star win Commerzbank’s pan-Euro loan portfolio as Oaktree wins German NPL

Commerzbank logoCerberus Capital Management, Colony Capital and Oaktree Capital Management, were underbidders on the pan-European loan portfolio.  Cerberus, Lone Star and BAML were underbidders on the German NPL. Commerzbank has attributed different names for the two loan portfolios to each investor.

CoStar News last reported on the sales process back in March, please click here.

The pan-European CRE loan portfolio includes loans secured by assets in Central and Eastern Europe markets, including Hungary and Romania, Turkey as well as Nordic countries.

While the pricing is not yet clear, the bulk of the pan-European loan portfolio is performing, with less than one-third by outstanding loan balance a mixture of sub-performing and non-performing. 

This is the second joint win by JPMorgan and Lone Star on acquiring legacy CRE loan portfolios form Commerzbank’s former property lending subsidiary, Eurohypo, after the pair carved up the €4.4bn Project Octopus in May last year.

The €752m German NPL is a different case. Almost all of the loans are in default and passed maturity, including many for some time with certain secured assets already working the way through insolvency.

Commerzbank’s German NPL has 257 loan tranches, comprised of 114 borrower groups with total liabilities, unpaid interest, amortisation and other costs, of €752.15m.  As a result of this loan composition, provisioning against the pan-European portfolio is low and therefore Commerzbank was seeking a small discount.

The property portfolio is 177-strong, including: 42 offices (including 5 assets with a mixed-use component), 35 multi-family blocks, 14 mixed residential and commercial buildings, 10 hotels, eight warehouses, seven shopping centres, five factory buildings, five retail parks and three logistics buildings.

There is also a raft of more unusual asset types, including three horse-riding farms, one furniture store, one cold storage house, one medical centre, one nursing home, one multi-storey car park and one petrol station with a supermarket.

While there are no current valuations for the underlying property portfolio, the annual passing rent is €51.2m. Based on passing rent, there is a considerable concentration of value within 10 assets which account for €26.2m, coincidentally also 51.2%, of the total portfolio income.

Plans to sell these two portfolios were first mooted back in December, as reported by CoStar News.

All parties declined to comment.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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