An eagerly anticipated ?5.4 billion ($6.9 billion) securitization of German multi-family housing loans is coming to market. The jumbo transaction, German Residential Asset Note Distributor (GRAND) is backed by loans originated by Deutsche Annington Immobilien, which is owned by Terra Firma, the U.K. private equity firm headed up by securitization trailblazer Guy Hands.

The transaction was delayed as a result of the corporate structuring and valuation process. The portfolio-part of which was bought from Vittera last year-includes 164,000 residential units, 1,037 million commercial square feet of commercial space and 38,000 parking units located across Germany. Deutsche Annington will use the proceeds from the transaction to repay and consolidate debt.

The securitization has been eagerly expected, as German multifamily property is expected to comprise a sizeable bulk of European CMBS issuance this year (SN, 4/13). The notes are being issued through an Ireland-based special purpose vehicle. Barclays Capital and Citigroup are lead managers, with the pair also serving as joint arrangers alongside Eurohypo.

An industry official said one key feature is the amount of subordinated paper being offered. "If the transaction follows an orderly process in terms of spread, then this could be a real test of the maturity of the market."

Officials at Barclays and Citigroup did not return calls.

Samantha Rowan
Managing Editor
Real Estate Finance & Investment
Securitization News
(212) 224-3996
srowan@iinews.com