European Market Update: First-Ever Euro CRE CLO; German Green Bond Issued

In the past week, news in the UK has pivoted slightly to a rather unexpected topic; petrol. For those who aren't aware, this week, the government announced the UK army will begin delivering fuel to petrol stations across the country in a bid to ease the "fuel crisis" described over the past few days.

In the European Structured Finance Market, we have also seen some unprecedented headlines, with the first-ever European CRE CLO transaction. On top of this, last week the Trepp team shared an update on the Global CLO market and a look at a green bond in German CRE.

First-Ever European CRE CLO Transaction

Last week, CRE CLOs made their way across the pond with Kroll Bond Rating Agency UK Limited (KBRA) announcing the assignment of preliminary ratings to ten classes of Starz Mortgage Securities 2021-1 DAC, a static CRE CLO transaction.

The CRE CLO transaction, collateralized by nine commercial mortgage (CMBS) loans and secured by 17 properties, is the first of its kind in Europe. The CRE CLO will reportedly issue notes in both GBP and Euros. According to KBRA's announcement, six of the loans, accounting for 84.8% of the transaction are GBP-denominated, with exposure across eight regions across the UK, and three of the loans, accounting for 15.2% of the transaction, are Euro-dominated, with exposure in Spain, Ireland, and the Netherlands.

Earlier this year, Trepp hosted a webinar with European Data Warehouse in which Vivek-Anand Dattani, Trepp's Head of EMEA and APAC discussed the CRE CLO market and the potential for its migration to Europe. He detailed the logistics of the market in the US and the impact it could have if we were to see such transactions in Europe. Listen to his analysis and watch the full webinar.

Strength of the Global CLO Market

Last week, Trepp shared an update on the growth of the CLO market, with the $1 trillion milestone being reached globally, citing somekey factors that have underpinned the strength and appeal of the asset classover the last few months. These factors include interest from the largest U.S. banks towards the senior portions of the capital stack, and a general repositioning towards floating-rate debt, such as typical CLO notes, to protect against the prospect of rising rates.

First Green Bond Issued by German CRE Specialist

The topic of ESG and green bonds has been hard to miss in the global CRE market over the past year. Last month, German commercial real estate specialist DIC Asset AG issued its first green bond worth €400 million (USD 472.9 million) to finance the attribution of existing or the acquisition of new green buildings.

Renewables Nowreported that the bond drew such demand with European institutional investors that there was an upsizing of the offering by €100 million. The bond is reportedly the next step in the company's sustainability strategy to raise the share of green buildings to about 20% (currently 11%) of the market value of its portfolio by the end of 2023.

CMBS Surveillance: Recent European Special Notices

• 1/Oct/2021
  Deal Name:ECLIP 2006-1Loan Name: Ashbourne Portfolio Priority A
  Special Notice:Disposal of a further trading care home (Rose Martha Court) for total gross sale consideration of £2.50m completed on 1/Oct/2021; proceeds will be distributed on Oct/2021 IPD.
• 1/Oct/2021
  Deal Name: ECLIP 2006-4 Loan Name:Ashbourne Portfolio
  Special Notice:Disposal of a further trading care home (Rose Martha Court) for total gross sale consideration of £2.50m completed on 1/Oct/2021; proceeds will be distributed on Oct/2021 IPD.
• 1/Oct/2021
  Deal Name: TAURS 2018-1IT
  Special Notice:Logo Borrowers repaid the loan in full, together with all accrued interest thereon and any associated fees and expenses, resulting in repayment to the Issuer of €32,904,000.00. Accordingly, the security granted by the Logo Obligors was released in full on 30/Sep/2021; Camelot Borrowers disposed of the Properties located in San Giuliano, Massalengo, Liscate, Parma, and Cherasco and repaid the loan in an amount equal to the aggregate of the Camelot Release Price applicable to each of those Properties, resulting in repayment to the Issuer of €54,739,940.98. Accordingly, the security granted by the Camelot Obligors in respect of those Properties was released in full on 30/Sep/2021; Bel Air Loan was not repaid and no security has been released in relation to the Bel Air Loan.
• 30/Sep/2021
  Deal Name: Euro 37
  Special Notice:Pursuant to an amendment and waiver letter dated 28/Sep/2021 entered into between Titan Acquisition Limited (as Borrower), Titan Financing Limited, Atlas Hotels Limited, Mount Street Mortgage Service Limited (as agent), and Mount Street Mortgage Servicing Limited (as security agent), the Agent has agreed that, with effect from the date on which the Agent confirms to the Lenders that it has received all documents and other items listed, the Lenders unconditionally and irrevocably waive the Loan Events of Defaults; Details to Amendment and Waivers to defaults provided in the notice.

The European Special Notices are originally published in our European Edition of TreppWire. If you are interested in seeing coverage of European Special Notices in your inbox every morning, click here.

Since establishing our London office over a decade ago, Trepp has modeled all European CMBS deals and offers a rich data set that dates back to the origination of the CMBS market in Europe. With a staff dedicated to the European market, Trepp is acknowledged as the market leader in its analysis of bonds and generated cashflows.

Disclaimer: The information provided is based on information generally available to the public from sources believed to be reliable.

Public link

Please use the above public link if you want to share this noodl on another website.