Deutsche Bank and Credit Agricole CIB has priced the five-year £750m STRAT 2014 agency-style commercial mortgage floating rate bond at 86 basis points over three month LIBOR.
The final pricing, confirmed within the last hour, comes at the lower end of the two investment bank’s 85 to 90 bps pricing guidance issued on Friday.
STRAT 2014 refinances the £550m senior club deal – underwritten by Eurohypo AG in London, HSBC Bank and Credit Agricole CIB in August 2011 and syndicated to Aareal Bank AG in London, AXA REIM SGP on behalf of its clients, Bayern LB, MetLife, Credit Foncier, Deutsche Pfandbrief Bank and Santander in October 2011.
The existing syndicated facility was priced at between 225bps to 250bps over three-month LIBOR, implying a margin reduction of up to a 164 bps for the sponsors, Westfield, Algemene Pensioen Groep and Canada Pension Plan Investment Board.
While the ratio of bond coverage was not disclosed, the level is understood to have been “comfortable”.
Furthermore, the pricing – at 86 bps – is thought to have reflected at least a 40 bps savings on likely pricing of a refinancing through a bilateral banking facility, illustrating the cost efficiency which can be achieved through capital markets.
The expected maturity of the structured mortgage bond is 4 November 2019, while the legal final maturity is November 2024.
Next up in the CMBS line for Deutsche Bank following STRAT 2014 is the possible securitisation of a €750m loan which refinanced IVG Immobilien with a €1.5bn new facility.