Cairn Capital has structured and placed GBP263.2m in commercial mortgage backed securities (CMBS) notes for Debussy DTC.
The deal is the first CMBS transaction in Europe not arranged by a bank. The notes, issued in exchange for Debussy warehouse notes, securitise a loan made to the Toys “R” Us Properties (UK) Ltd in March 2013 to facilitate the repayment of the Vanwall Finance CMBS notes.
“This benchmark placement was agreed directly between the investors and the borrower, enabling the creation of a bespoke capital markets financing arrangement tailored to suit the specific requirements of the borrower,” says Peter Hansell of Cairn Capital.
The transaction incorporates key features set out in the investor guidelines issued by a group of major European CMBS investors published by this group on March 2013.
Total debt of GBP263,159,000 was placed, comprising A Notes (GBP184,211,000), B Notes (GBP52,632,000) and C Notes (GBP26,316,000). The A Notes are rated A- by S&P and BBB (low) by DBRS. The A Notes bear a fixed coupon of 5.93 per cent; the B Notes bear a fixed coupon of 8.25 per cent; and the C Notes bear a fixed coupon of 10.5 per cent. The underlying loan has a seven-year maturity (to July 2020), with a five-year “tail” to legal maturity (July 2025). As part of the transaction, GBP19.3m in liquidity support has been placed in a reserve account.
Debussy DTC, a special purpose securitisation company, is incorporated in England. The notes are listed on the Irish Stock Exchange.