Aareal Bank has concluded its largest CMBS securitization transaction to date, amounting to Ã¢âÂ¬ 1.7 billion, which is being placed last night with international investors. It is also the largest European CMBS transaction this year.
The portfolio comprises 93 loans, collateralized by 200 commercial properties across 14 countries. The country allocation is focused on Sweden (approx. 20%), Germany (approx. 15%) and Great Britain (approx. 14%). Aareal Bank is also securitizing loans from the Czech Republic and Turkey, who are included for the first time in the European CMBS markets. The portfolio is also characterized by a significant diversification in relation to the types of property involved, which include offices, miscellaneous used properties, shopping centres, warehousing/distribution, hotels and high volume residential properties.
Aareal Bank is acting as Arranger and Co-Manager. Commerzbank Securities is Lead Manager and Co-Arranger.
The credit risks are transferred to investors through the issue of Credit Linked Notes and the conclusion of Credit Default Swaps. Aareal Bank itself appears as the issuer of the Credit Linked Notes. The transaction has been rated by Standard & PoorÃ¢â¬â¢s and MoodyÃ¢â¬â¢s. The part of the transaction with the highest rating (AAA, Aaa) amounts to Ã¢âÂ¬ 1.27 million (Senior Swaps). The loans are reported at either Aareal Bank or Aareal Hyp. The structure of the transaction allows the portfolio to be topped up with new loans subject to certain prerequisites.
Last year Aareal Bank placed a similarly structured commercial securitization transaction with international investors. Ã¢â¬ÅGlobal Commercial OneÃ¢â¬Â covered a volume of Ã¢âÂ¬ 1.5 billion. Together with Ã¢â¬ÅGlobal Commercial TwoÃ¢â¬Â Aareal Bank has therefore securitized a total of Ã¢âÂ¬ 8.2 billion (a third of its credit portfolio).
This reflects the consistent direction followed by Aareal Bank under its buy & sell strategy. Ã¢â¬ÅIn the next year we aim to re-establish our excellent position as a Frequent Issuer of Mortgage Backed Securities with further MBS transactions. With the large amount of securitized credits in our portfolio, we are already enjoying our role as a leading player among Real Estate Banks in Germany' says Dr. Ralph Hill, member of Aareal BankÃ¢â¬â¢s Executive Board.
Source: Aareal Bank