Allen & Overy continues run of German CMBS with GAGFAH Group EUR736.6m refinancing

24 Oct, 2013

Allen & Overy has advised GAGFAH Group, the second-largest German multi-family property group, on a EUR736.6 million Commercial Mortgage-Backed Securities (CMBS) issuance to refinance its Quadriga portfolio of multi-family properties.

The proceeds of the new CMBS (German Residential Funding 2013-2 Limited) are secured by GAGFAH Group’s Quadriga portfolio of approximately 29,116 rental units and were used to refinance loans which had been sold into the capital markets in 2008 as part of the DECO 17 CMBS.

The arrangers and lead managers are Bank of America Merrill Lynch and Deutsche Bank.

Due to strong investor demand, it was possible to refinance the existing securitised loans through a CMBS at very attractive terms, with an average interest rate (excluding EURIBOR) for the new CMBS (excluding the Class G Notes) of 1.63763% p.a. The new senior loan has a term of five years, ending in November 2018, plus a one year extension option, with an agreed amortisation of at least 0.125% per quarter. The CMBS notes will have to be redeemed by November 2024 at the latest. The AAA-tranche of the CMBS accounts for EUR431m.

The transaction was structured as an agency CMBS transaction under which the borrower, its sponsor and its counsel are involved from the outset in structuring the securitisation aspects of the issuance (in contrast to a true sale CMBS where the securitisation is executed solely by the lender following the making of the loan).

In addition to the new GRF 2013-2 CMBS Allen & Overy has also recently advised on GAGFAH’s EUR2.1 billion GRF 2013-1 CMBS (the largest German CMBS since the financial crisis).

The Frankfurt team advising GAGFAH included Dr Olaf Meisen, Mark Manson-Bahr (both Finance), Matt Howard (Structured Finance), counsel Dr Stefan Henkelmann (Structured Finance) and Stefan Kuhm (Finance) as well as senior associates Vanessa Pfeiffer (Finance), Jens Nollmann (Structured Finance), Dr Christian Hilmes (Real Estate) and Stuart Gregory (Derivatives).

The London team included partner Christian Lambie, senior associate David O’Connor, associates Iona Misheva and Irvine Robertson (all Structured Finance).

And Luxembourg advice was provided by partner Pierre Schleimer and associate André Hommel (both Finance).

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