Deutsche Bank has teed-up the first Irish commercial securitization deal since the crash in a move that could open a new debt market for large scale property investors.
Loans from three borrowers, understood to include Kennedy Wilson, the Comer Group, and Paddy McKillen & Johnny Ronan, will underpin new bonds to be issued on the markets.
The deal is through DECO 105 - HARP, a company that was registered in Ireland in the first week in March.
Deutsche Bank has bundled up a €175m commercial mortgage backed securitization (CMBS), comprised of three loans secured on 18 residential, retail and office properties in Dublin (86pc), Cork (8pc) and Galway (4pc) and greater Dublin (2pc).
The three loans were originally issued by Deutsche Bank, which is the sole underwriter and bookrunner on the planned CMBS which is expected to price this week.
The property lending underpinning the structure is at a fairly conservative loan to value ratio of 62.8pc.
The average remaining loan term is 4.6 years, average occupancy in the properties is 83pc, and 97pc for the residential portion.
The new deal will be launched this week to close by mid April.
One loan worth €87m is tied to the Comer Group refinancing debt held against a number of residential properties.
Another, worth €47.5m is tied to Kennedy Wilson, while the third loan worth €39m is to refinance Mr McKillen and Mr Ronan's purchase of the Treasury Building in Dublin 2.
The last Irish CMBS deal was back in 2006. While securitization has been widely blamed for exacerbating the global financial crisis it played a relatively minor role in financing property deals here, a market that was instead dominated by the main Irish banks, with dire consequences when the market crashed.
Investors were hit with losses when the €460m "Opera Finance CMH" CMBS structure linked to the old Treasury Holdings property business went into default and ultimately was sold on behalf of creditors following the crash.
The 16 highly regarded properties underpinning "CMH" were bought by Kennedy Wilson and Varde.
This week Kennedy Wilson agreed a €131m finance deal with US insurer MetLife, seciured on four Irish peoperties including The Alliance, Sandford Lodge and Clancy Quay apartment blocks in Dublin. It is MetLife's first time making commercial mortgage loans in Ireland.