The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

CMBS: Tesco turns back the clock

Corporate, not real estate, is key; White Tower teeters on the brink

Tesco Stores are to be securitized

Tesco Stores are to be securitized

The European securitization market witnessed that rarest of things in June – primary issuance in the real estate-backed securitization market. And commercial real estate-backed at that. Tesco Property Finance 1 is a £430.6 million ($703.1 million) single-tranche deal backed by retail properties that are subject to 30-year bondable occupational leases with Tesco Stores, the UK’s largest supermarket chain. But this deal is very far from what the market had come to understand as CMBS. It is a straightforward sale-leaseback transaction where the bonds are linked to lease payments guaranteed by Tesco. As such the deal is more of a corporate securitization, linked to the credit quality of Tesco itself, not the value of the underlying properties. It was also clearly targeted at long-term institutional buyers – with a final maturity of 2039 – rather than the traditional ABS investors of old. The deal was arranged by Goldman Sachs. "This deal is innovative in its simplicity," says Ben Green, executive director in structured finance at Goldman Sachs in London.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree