Hatfield Philips International. DECO 15 Pan Europe 6 Ltd. Investor Call. 6 th March 2015

Transcription

1 Hatfield Philips International DECO 15 Pan Europe 6 Ltd. Investor Call 6 th March 2015 Hatfield Philips International 25 Canada Square 34th Floor London E14 5LB

2 Disclaimer This report has been compiled by Hatfield Philips International Limited ("Hatfield Philips") in its capacity as Special Servicer of the loans which are discussed in this report. Hatfield Philips makes no representation as to the reliability of the information provided to it by third parties in order to compile this report. Information in this presentation should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments. This presentation may contain forward looking statements. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside Hatfield Philips s control. Neither the whole nor any part of this report may be reproduced in any published document, circular or statement, nor is it to be relied upon by any party, without the prior written permission of Hatfield Philips. Hatfield Philips disclaims any duty, responsibility or liability of any nature whatsoever to any party in respect of this report other than to its contractual partners.

3 DECO 15 Pan Europe 6 Limited DEAL SUMMARY Asset Profile Current Balance ( ) # Property Loan Whole Loan A-Note B-Note(s) Properties Location Type Maturity Loan Status Transfer Date Workout Strategy Mansford Obi Large 146,316, ,024,236 6,292,352 9 Germany Commercial Jul-2014 In Special Jul-2014 Borrower-led sale Main 68,633,971 68,633, Germany Predominantly Retail Jul-2011 In Special Jul-2011 Portfolio stabilisation and disposal Plus Retail 11,835,621 11,835,621-5 Germany Retail Jan-2012 In Special Jan-2012 Lease regearing with anchor tenants Total 226,786,180 Value Valuation Loan ( ) Date Current Whole Loan LTV Occupancy WALL Mansford Obi Large 130,100, Sep % 100% 7.3 Years Main 49,590, Jun % 93 % 3.8 Years Plus Retail 8,590, Nov % 100% 5.0 Years Total 184,280, % 97% 3

4 Mansford OBI Large Loan Status UPB at Origination EUR 160,984,318 Current UPB EUR 146,316,588 Initial Whole Loan LTV 92.2% Current Whole Loan LTV 112.5% Special Servicing Transfer Date 25 July 2014 Estimated Final Resolution Date Q Asset Stats Lettable area 112,187 sqm No. of assets 9 Asset type Retail - DIY Valuation/Date EUR 130,100,000 / 1 Sep 2014 Location Germany NRI EUR 11,402,405 ERV EUR 11,293,081 Vacancy 0% WALL 7.3 years Workout History The loan matured on 21 July Following the payment default at maturity the loan was transferred to Special Servicing. The Borrowers, represented by asset manager GreenOak had launched a marketing process before transfer. The marketing efforts resulted in various bids on individual properties and the whole portfolio. In particular, three promising indicative portfolio bids ranging between EUR 115m and EUR 130m were received. However, all of the three interested parties stepped back in October A workout structure was verbally agreed between the Borrowers, the Special Servicer and the Subordinate Lender as Controlling Party in late summer The agreement is about to be finalized. The Borrowers intend to put the properties on the market again; broker to be selected shortly. Performance / Credit Events The loan is in default. Following the non-payment EoD a servicing transfer event had occurred and the loan was transferred to Special Servicing in July A cash sweep mechanism is in place that has been resulting in loan payment amounts of EUR 4.5m at the last two IPDs since transfer. Following the re-valuation of the portfolio in September 2014, a Control Valuation Event as well as an Appraisal Reduction occurred. The Borrowers represented by their asset manager GreenOak are highly co-operative. Strategy Enter into restructuring agreement with the Borrowers and new asset management agreement with GreenOak. Broker pitch involving GreenOak and the Special Servicer is set for 19 March Develop marketing strategy and sell off the properties. 4

5 Mansford OBI Large Property Information Property No. Property Valuation Date Valuation Sold Amount Repayment IPD 1 Berlin-Neukölln, Naumburger Straße Sep-14 19,900,000 2 Berlin-Steglitz, Goerzallee Sep-14 39,200,000 3 Vechta, Falkenrotter Str Sep-14 8,000,000 4 Augsburg-Stadtbergen, Ulmer Landstr Sep-14 10,100,000 5 Siegen-Weidenau, Weidenauer Str Sep-14 9,500,000 6 Schwelm, Talstr Sep-14 13,200,000 7 Pirna, Dresdner Str. 01-Sep-14 7,000,000 8 Neuss, Kölner Str Sep-14 15,200,000 9 Haiger, Lohwiese 1 01-Sep-14 8,000,000 Total 130,100,000 5

6 Main Loan Status UPB at Origination EUR 86,745,908 Current UPB EUR 68,633,971 Initial Whole Loan LTV 86% Current Whole Loan LTV 138% Special Servicing Transfer Date 22 July 2011 Estimated Final Resolution Date End of 2016 Asset Stats Lettable area 75,847 sqm No. of assets 32 Asset type Predominantly Retail Valuation/Date EUR 49,590,000/01 June 2013 Location Germany NRI EUR 5,399,974 ERV EUR 6,108,957 Vacancy 7.00% WALL 3.8 years Strategy Workout History The loan transferred to Special Servicing in July 2011 due to non-repayment at maturity. In May 2012 the Security Agent exercised its voting rights over the shares of the Main Borrower. The managers of the Main Borrower were removed and an independent administrator was appointed, with a view to stabilizing the portfolio and disposing the Main Properties. Three assets are about to be sold individually (Bad Kreuznach, Glauchau, Bielefeld). These assets are vacant/development properties; the sales will result in more homogenuous retail portfolio. For three assets (Bad Blankenburg, Marktoberdorf, Selb) the tenant Netto expressed interest in an acquisition. The Special Servicer is examining whether the sale should be proceeded, or properties should be part of a portfolio. The Special Servicer initially favoured individual asset sales/bucket sales but with the market liquidity having improved recently, a portfolio sale is now contemplated. Further analysis will be done before the final decision is being taken. Lease extensions to be negotiated before sales process begins (timing: end of 2015). Performance / Credit Events The loan is currently in default. The loan Maturity Date was 20 July The Special Servicer continuously revised and reassessed the option to sell versus to hold the portfolio or any part of it. By holding the portfolio in the last 4.5 years, the Issuer has benefitted of a considerable loan amortisation of EUR 13.3m coming from excess NOI, coupled with almost unchanged level of vacancy and NRI, thanks to the stabilization of the portfolio and strategic asset management initiatives. A number of leases have been renewed in Among these, the lease with Kaufland (second largest tenant) was extended above market level until 02/2029, and the leases with KiK at 4 locations will be extended until 12/2024. Further lease extensions with OBI in Bad Freienwalde, Toom in Backnang, Pfennigpfeiffer in Bad Blankenburg and Penny in Burgsinn are intensively being negotiated. Asset manager will enter into discussion with further tenants to seek extensions. Since the transfer of the loan to Special Servicing, the Special Servicers primary exit strategy has been to ensure stabilization of the portfolio and subsequent disposal of the Main Properties. When the loan transferred to special servicing the WALL was 4.56 years. After consultation with the OA it was agreed that the market for properties with this lease length was weak. A decision was made to continue to manage the portfolio and extend and re-gear leases when possible and consider strategic sales where sensible. There is a continuing dialogue with the Asset Manager and the OA regarding updates and implementation of the business plan. 6

7 Main Property Information Property No. Property Valuation Date Valuation Sold Amount Repayment IPD 1 Backnang, Weissacher Straße Jun Bad Blankenburg, Gustav-Töpfer-Straße 3 a-c 01-Jun Bad Colberg-Heldburg, Lindenauer Straße Jun Bad Freienwalde (Oder), Eduardshof 01-Jun Bad Kreuznach, Planiger Straße Jun Bielefeld, Beckhausstraße Jun Burgsinn, Im Unterreith 1 01-Jun Crossen an der Elster, Bahnhofstraße / Lange Wiese 01-Jun Demmin, Jarmener Chaussee 5 01-Jun Ebersbach-Neugersdorf, Bautzener Straße Jun Essen, Zur Beckhove Jun Glauchau, Sachsenallee Jun Görlitz, Biesnitzer Straße 1a 01-Jun Görlitz, Pontestraße 10 / Heilige-Grab-Straße 01-Jun Hagen, Elberfelder Straße Jun Hainichen, Bahnhofstraße Jun Jena, Weimarische Straße 3 01-Jun Leingarten, Eppinger Straße Jun Lutter am Barenberge, Frankfurter Straße Jun Magdeburg, Kümmelsberg Jun Marktredwitz, Fritz-Thomas-Straße Jun Marktoberdorf, Bahnhofstraße Jun Michendorf, Michendorfer Gartenstraße Jun Neustadt in Holstein, Eutiner Straße Jun Neustadt a.d. Donau, Gewerbepark Jun Niemegk, Bahnhofstraße Jun Nürnberg, Strawinskystraße Jun Osterwieck, Am Langenkamp Jun Peine, Peiner Straße 8 01-Jun Ritterhude, An der Ihle 5 01-Jun Selb, Albert-Pausch-Ring 4 01-Jun Sondershausen, Frankenhäuser Straße 4 01-Jun Total 49,590,000 7

8 Plus Retail Loan Status UPB at Origination EUR 12,671,741 Current UPB EUR 11,835,621 Initial Whole Loan LTV 89% Current Whole Loan LTV 138% Special Servicing Transfer Date 26 January 2012 Estimated Final Resolution Date 2017 Asset Stats Lettable area 8,557 sqm No. of assets 5 Asset type Retail Valuation/Date EUR 8,590,000 (26/11/2013) Location Germany NRI EUR 1,013,336 ERV EUR 868,252 Vacancy 0% WALL 5.0 years Strategy Workout History The Plus Retail Loan was transferred to Special Servicing following a maturity default. Special Servicer facilitated reconfiguring of Cottbus asset; fire protection issue in Cottbus was resolved following discovery of defective ceilings throughout the asset. Main tenant is Netto: the Borrower and the Special Servicer aimed to negotiate lease extensions for 15 months, which failed beginning 2014 Main issue of contention is Netto requirement for construction of in-store bakeries in all Netto stores. The properties were former Plus stores, and had no purpose-built bakeries. End of 2014 negotiations have been resumed. An analysis instructed by the Special Servicer shows construction of in-house bakeries would cost approx. EUR 3.5m. Currently the Borrower holds cash of approx. EUR 900k. Special Servicer is examining its options with the exisiting funds. Performance / Credit Events The interest rate of the loan was switched to floating during the restructuring process. Payment of EUR 200,000 principal in Q Following payment for fire protection and TIs, cash trapped in rent account in anticipation of renegotiation of deal with Netto. Occasional informal DPO offers from sponsor at unattractive levels. A premature 10-years lease extension at the Anklam asset with Tedi with no rent reduction. Contact between Special Servicer and Borrower has been re-established. Discussions on a consensual sale are taking place. Currently, there is agreement on timing, but the proposed fee levels for a consensual sale differ significantly. Continue to trap cash in anticipation of TI/capex requirements for Netto lease extension. Reopen/Continue lease regearing negotiations with Netto. Special Servicer to continue discussions with borrower in respect of a consensual route, considering alternative options as well. 8

9 Plus Retail Property Information Property No. Property Valuation Date 1 Rüdersdorf bei Berlin, Mühlenstraße Nov-13 2 Schwedt/Oder, Julian- Marchlewski- Ring 13c 26-Nov-13 3 Anklam, Lübeckerstraße 2a-2c 26-Nov-13 4 Wittenberge, Lenzener Chaussee Nov-13 5 Cottbus, Gelsenkirchener Allee/ Thierbacher Straße Nov-13 Valuation Sold Amount Repayment IPD Total 8,590,000 9