pbb Deutsche Pfandbriefbank has provided a €72 million loan to affiliated companies of Cerberus Capital Management L.P. These affiliates will use the funds to purchase a maturing mortgage loan that will subsequently be converted into a long-term real estate loan. The relevant loan agreements were signed in June 2014.
The loan receivable purchase was part of a larger loan portfolio acquired by Cerberus affiliates. The financing will be converted into a long-term real estate loan upon acquisition of the commercial properties, which will take place via assumption of liabilities. With this transaction, pbb has financed the acquisition of a loan receivable for the first time prior to the transfer of title to the financed properties.
The commercial real estate portfolio includes seven retail properties in good to very good micro locations of major cities in Western and Southern Germany. Cerberus plans to significantly revitalize the properties. With Estama Real Estate Management, Cerberus has retained an experienced asset manager that specializes in the retail sector and is familiar with the portfolio, having served as property manager for the portfolio for several years already.
Gerhard Meitinger, Head of Real Estate Finance Germany at pbb Deutsche Pfandbriefbank, said: "This complex financing clearly demonstrates pbb's strong structuring skills. In a first step, the bank provided a loan, collateralized by a real estate lien, to purchase a maturing loan. In a second step, this loan will be converted into a long-term real estate financing. I am pleased that pbb was able to structure this facility for Cerberus, continuing our long-standing and successful business relationship."
Source: pbb Deutsche Pfandsbriefbank