Situs to service first non-prime CMBS

Property adviser Situs said it has been appointed to service the £263 mln (€305 mln) CMBS on the Toys R Us UK portfolio.

The so-called Debussy DTC PLC CMBS is the first non-prime commercial property European commercial securitisation transaction to take place since the financial crisis.

Toys R Us refinanced the matured Vanwall transaction in April 2013 with an initial seven-year fixed rate bridge loan. The loan was subsequently securitised into the Debussy DTC PLC £263m CMBS issuance on 24 July with the transaction tailored to the lending requirements of Toys R Us and the underlying noteholders.

The securitisation was structured by Cairn Capital as arranger with the transaction comprising three classes of bonds A, B and C with ratings provided by Standard & Poors and DBRS to the Class A Notes.

‘As European markets stabilise, investors are looking for growth, so it is inevitable that the focus will start to shift from prime assets to secondary assets,’ said Bruce Nelson, chief operating officer of Situs. ‘With the introduction of the Debussy DTC PLC CMBS transaction, hopefully we will see this kick-start the financing of other challenging asset classes, and show an evident recovery in the European securitisation markets,’ he added.

Situs has over €22 bn in special servicing and is one of the largest third-party servicers in Europe.

Its European servicing operations are primarily run and managed from London, with some assets and portfolios overseen by Situs Global Servicing subsidiary in Frankfurt, Germany.