X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(To read more on the multifamily market and the debt and equity markets, click here.)

BERLIN-UK private equity firm Terra Firma will shortly refinance the debt used to buy its German property interests with the largest bond backed by commercial mortgages ever issued in Europe. The firm hopes to raise euro 5.4 billion ($6.8 billion) to refinance the cost of buying a portfolio of 150,000 flats.

German Residential Asset Note Distributor, or Grand, as the vehicle issuing the bonds is called, set the terms on Monday for its euro 5.4-billion ($6.8-billion) deal. This is the latest in a string of German CMBS linked to large portfolios of residential flats and houses sold by industrial companies and local authorities.

The Terra Firma deal is not a CMBS bond in the conventional sense. Traditionally these bonds are backed by one or two big loans to finance office blocks or retail space whereas the German multifamily deals tend to draw on a wider source of loans. The multifamily deals have been helping to prop up the CMBS market this year, which last year doubled in size. A report by Standard & Poor says the increase in multifamily deals has pushed German CMBS issuance so far this year to euro 6.2 billion ($7.8 billion) and that there was another euro 11 billion ($6.8 billion), including the Terra Firma deal, in the pipeline. Last year, German CMBS issuance amounted to a total of euro 5.4 billion ($6.8 billion).

Terra Firma’s German property vehicle, Deutsche Annington, paid euro 7 billion ($8.8. billion) in August to acquire the 150,000 flats owned by Viterra, the housing unit of power company Eon, in Germany’s largest ever private equity deal. The funds raised in the securitization will be used to refinance the debt in the Viterra deal and other debt in Deutsche Annington, which was bought by Terra Firma in 2001.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

 

GlobeSt. Multifamily Spring 2022 (Formerly APTS)Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt
Live Chat

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.