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Deutsche Annington, the German property group owned by Guy Hands' Terra Firma Capital Partners, will price Germany's largest property securitisation today (Friday), raising Eu5.5bn.
Led by Barclays Capital and Citigroup, the deal will refinance Deutsche Annington's Eu7bn purchase of the Viterra housing portfolio from E.On, the energy utility -- one of the largest housing acquisitions in Europe.
The deal, German Residential Asset Note Distributor (Grand), attracted widespread interest from investors, despite coming at a time of record issuance in the commercial mortgage backed securities (CMBS) market.
Issuance in July has almost doubled Europe's previous record monthly output of Eu5.6bn, reached at the end of last year.
"Given the size of deal, some doubted whether the market could absorb an issue of this size," said David Basra, European head of structured finance at Citigroup in London. "The European ABS market has shown its appetite for this new, emerging asset class."
Deutsche Annington originally financed the purchase with a Eu4.33bn five year acquisition facility granted by a consortium of seven banks. Citigroup and Barclays Capital, which lead arranged the bridge financing, are also leading the securitisation.
It will term out the acquisition debt, as well as a second five year facility put in place at the time of the Viterra acquisition to refinance Deutsche Annington's existing debt.
Securitisations of portfolios of German flats are becoming familiar landmarks on the European securitisation scene, as the country's big corporate and government employers unwind their large estates of workers' housing.
Since the assets are so granular and their risk is regarded as low, German rented...