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WestLB Shop Serves Up Unique CMBS

--Cristina Pittelli

WestLB’s financing subsidiary Westdeutsche ImmobilienBank has closed a unique commercial mortgage-backed securitization where most of the loans backing the transaction are not initially secured by mortgages. The portfolio of the €525 million ($692 million) WIRE 2008-1 is composed of 13 loans made by Westdeutsche, 12 of which were to German investment companies with open-ended real estate funds that have agreed to grant mortgages on predetermined properties when and if the lender demands it.

Moody’s Investors Service has rated the deal A2. Most of the properties are office spaces. The majority are located in France at 83%, followed by the Netherlands with 8% and 6% in Belgium and 3% in Germany. The largest borrower accounts for 54% of the portfolio. The weighted average loan-to-value ratio of the portfolio is 66%.

According to Moody’s analysts, the absence of mortgages for most of the loans is one weakness of the transaction, although this is in part mitigated by the borrowers’ respective agreements to grant mortgages. Analysts also noted the credit strength of the open-ended funds as a positive for the deal. Officials with Westdeutsche could not immediately be reached to provide further details. 

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