RPT-Fitch: Strong Refinancing Activity in German Multifamily Housing Market

RPT-Fitch: Strong Refinancing Activity in German Multifamily Housing Market
Tue May 14, 2013 3:40am EDT

http://www.reuters.com/article/2013/05/14/fitch-strong-refinancing-activity-in-ger-idUSFit65614820130514

May 14 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings says in a new report that refinancing activity has been strong in the German multifamily (MFH) CMBS transactions, but balloon risk still remains.

"There has been considerable refinancing activity in the German multifamily sector over the past year," says Alessandro Pighi, Senior Director in Fitch's European Structured Finance team. "A number of large sales and refinancing transactions have also been executed and the first two post-crisis German multifamily CMBS have been priced, indicating continued investor interest. These are certainly positive indicators for outstanding CMBS deals."

The two largest transactions (German Residential Asset Note Distributor plc and German Residential Funding plc ), together account for three-quarters of the total outstanding securitised German MFH debt balance. "Fitch's concerns for German vintage multifamily CMBS transactions remain focused on balloon risk," says Tuuli Krane, Director in Fitch's European Structured Finance team. For the large German MFH transactions, with experienced sponsors, asset performance has not posed a risk during the transaction terms since 2006/2007.

"Both the collateral and the loan performance of the largest transactions have remained stable or even improved over the past few years. This is visible across a number of performance indicators, which include rental levels, vacancy rates, coverage ratios and leverage," says Mario Schmidt, Associate Director in Fitch's European Structured Finance team.

The report, entitled "German Multifamily Housing - A Performance Update", is available at www.fitchratings.com. The report details the past performance of the two main multifamily transactions. In order to place these transactions in the context of the German property market, the report also provides an overview of sector trends.

The rating action commentaries, 'Fitch Affirms GRAND Notes Following Scheme of Arrangements', published on 21 December 2012 and 'Fitch Affirms German Residential Funding plc; Stable Outlook' published on 4 April 2013 are available on www.fitchratings.com.

ink to Fitch Ratings' Report: German Multifamily Housing

http://www.reuters.com/article/2013/05/14/fitch-strong-refinancing-activity-in-ger-idUSFit65614820130514