- True sale securitisation of loans to open-ended real estate funds with a volume of approx. € 400 million
- First-time use of refinancing register for a securitisation transaction
January 11, 2007 –Westdeutsche ImmobilienBank AG (WIB) is for the first time implementing a Commercial Mortgages Backed Securities (CMBS) transaction via a German special-purpose company. This special-purpose company is known as WILCO 2007-1 GmbH and was provided by True Sale International (TSI).
International Top Quality Portfolio
The borrowers are six German investment companies (KAGs). The securitisation portfolio comprises financings of ten open-ended real estate funds. Apart from two cases, the loans are not collateralised by registered mortgages, but mortgages can be registered upon first demand. The collateral is located in a total of six European countries.
In this True Sale transaction WIB transfers the loans to the special-purpose company WILCO 2007-1 through use of the new refinancing register. Each loan was synthetically divided into a senior loan and a junior loan. Only the senior parts will be placed in the capital market through the issuance of two classes of notes graded according to their risk content. The bonds are rated AAA/Aaa and AA/A2, emphasizing the high quality of the underlying portfolio.
Loan administration will remain in the responsibility of WIB.
Hubert Beckmann, Chairman of the Managing Board of WIB, said: “This True Sale securitisation is an important step in WIB´s buy and sell strategy. The new refinancing register offers much greater flexibility in this regard. There is enormous potential, because capital market interest in German real estate risks is just beginning.”
WIB and WestLB AG are Joint Arrangers for the transaction. WestLB AG is also responsible for placement as Lead Manager and Bookrunner.
The Class A Notes (triple A Notes) of the transaction will be certified by TSI and thus meet the minimum standards required by TSI for transparency, availability and liquidity.
More Flexibility and Lower Costs via New Refinancing Register
Dr. Hartmut Bechtold, a member of the TSI management, said: “The first-time use of the refinancing register in a rated public CMBS transaction is a milestone in the development of the German securitisation market. We are delighted that this is a TSI transaction in which WestLB, a TSI shareholder, is involved.”
Under the TSI certification process, the investors receive an updated report on important changes in the portfolio. These include information on key ratios of the underlying real estate loans and the respective investment funds.
Prior to the launch of the new refinancing register in Germany, it was necessary to transfer the entire assets and collateral. This was very time-consuming and involved considerable administrative and other costs, especially in connection with the entry of registered land charges. The new law includes the guarantee of protection in the event of insolvency. The new arrangements, which came into effect in September 2005, ensure that, upon entry in the refinancing register, the respective beneficiaries – in this case the special-purpose company WILCO 2007-1 GmbH – have “insolvency-remote” access to the assets and collateral of the seller – in this case Westdeutsche ImmobilienBank AG. The refinancing register is managed by the seller and supervised by an administrator appointed by the BaFin.
TSI already began to canvass for the adoption of the new rules in 2003, because the new law opens up considerable potential in Germany for bank loans which can be leveraged for refinancing purposes, i.e. securitisations.
Contacts:
Westdeutsche ImmobilienBank AG
Martin Weber
Fon: +49 (0) 6131 9280 7222
martin.weber@westimmobank.com
WestLB AG
Matthias Renner
Fon: +49 (0) 211 826 6584
matthias_renner@westlb.de
True Sale International GmbH
Dr. Hartmut Bechtold
Fon: +49 (0) 69 2992 1710
hartmut.bechtold@tsi-gmbh.de