BAML tests CMBS market with first deal of the year in €317m Blackstone-sponsored Kingfisher transaction

BAML has launched the first European CMBS of the year, the securitization of a loan extended to Blackstone to acquire the Kingfisher retail-led property portfolio in Germany from bad bank FMS Wertmanagement.

The capital structure for the €317.05m TAURUS 2016-1 DEU is as follows:

CLASS SIZE    EXP. RATINGS   LTV    WAL  

  • A €141.6  [AAA/Aaa]     [30.1] [4.57] 
  • B €38.2   [AA(hi)/Aa3]  [38.3] [4.57] 
  • C €25.5   [AA(lo)/A3]   [43.7] [4.57] 
  • D €41.8   [BBB/Baa3]    [52.6] [4.57] 
  • E €52.6   [BB/Ba3]      [63.8] [4.57] 
  • F €17.35  [BB(lo)/B2]   [67.5] [4.57]

BAML retained 5% stake in the underlying loan, implying the original loan extended to Blackstone was €333.7m, while the margin is sub 300 basis points. The loan has a four-year duration and the CMBS has a six year tail period, taking legal final maturity to November 2026.

The property portfolio is has an appraised value of €494.4m, reflecting an LTV of 67.5%. Blackstone reportedly acquired the Kingfisher property portfolio last summer for circa €470m from FMS Wertmanagement.

DIY retail accounts for the majority of market value, which breaks down as follows:

·         DIY 37%,

·         Retail Park 21%,

·         Other 18%,

·         Supermarket 12%,

·         Shopping Centre 10%,

·         Retail Warehouse 2%.

The current occupancy is 92.8%, gross rent €44.6m; net operating income is €40.9m, lettable area is 496,936 sq m. WAULT to expiry is 6.9 years, while WAULT to first break is 6.9 years. The Debt Yield net rental income is 12.3%.

It has been a slow start to the new for new issuance of European CMBS, with issuing investment banks cautious due to renewed macro uncertainty driven by China’s equity market tumble, and concerns over it GDP growth, commodity and oil prices as well as, more recently, the spectre of a Brexit.

All of which creates uncertainty which dampens appetite among investors in CMBS transactions. Rival investment banks will keenly follow the pricing level this relatively stabilised transaction closes at.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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