Opera Germany (No.3) Ltd. has issued €550 million of commercial mortgage backed securities, rated AAA & AA by Standard & Poor's and AAA by Fitch Ratings. This is Eurohypo's 15th Opera deal, bringing total issuance volume under the programme to €8.7 billion.
Caroline Philips, Head of European Securitisation at Eurohypo, says, "We are extremely pleased with the high level of interest in Opera Germany (No. 3) and particularly happy to have been able to attract new investors. The favourable bond pricing recognises the suitability of this transaction for the capital markets and provides support to our strategy to use securitisation ever more extensively. This is a promising start to 2007: we hope to continue the year with further issuance from all three of our securitisation programmes Opera, Semper and Europa and have plans to bring at least three more issues to market in the coming months."
The strong credit quality of the Federal State of Hesse as a tenant and the 30 year lease term, combined with a straightforward senior loan and CMBS structure ensured strong interest in the transaction, including a significant number of investors new to the Opera programme. UK, German and Irish investors purchased just under two-thirds of the bonds, but all in all investors from 15 countries participated. The triple-A rated Class A was 5 times oversubscribed and priced at a spread of 16 basis points over the reference rate.
Jochen Heuchert, Head of Eurohypo's Frankfurt Branch, which originated the loan in December 2006, adds, "Our expectations for the profitability and success of the transaction have been exceeded. We consider this a significant achievement for the bank."
The transaction is secured on a single 10-year loan to nine German borrowers, who are ultimately sponsored by the Austrian property company CA Immobilien Anlagen AG. The underlying portfolio comprises 36 office properties, all of which are let to the Federal State of Hesse under a 30-year lease. The portfolio includes the Ministry of Economic Affairs and the Ministry of Culture in Wiesbaden, as well as police stations, court houses and various administrative offices located in 19 cities across the Federal State of Hesse.
Citigroup and Bayerische Hypo- und Vereinsbank acted as Joint Bookrunners to the issue.