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Blackstone taps CMBS to refinance Italian logistics portfolios

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A trio of private equity-sponsored commercial real estate loans underwritten by the Milan branch of Bank of America Merrill Lynch is securing a new €300 million, multiborrower Italian CMBS offering.

Taurus 2018-1 IT S.r.l. is a securitization of three two-year commercial real estate loans that pay only interest, and no principal, for their entire terms. They include a pair financing industrial logistics properties in northern Italy owned by Blackstone Group.

The third loan issued for the refinancing of an existing real estate loan for retail assets in central and southern Italy held by the $74 billion-asset Partners Group.

Partners purchased the properties in February from Blackstone, which in recent years has focused strongly on acquiring, improving and selling off commercial assets in Europe, according to DBRS.

The loans total €359.6 million, but only €300 million (or 83.4%) will be securitized, with the borrowers retaining the balance, according to DBRS. The borrower on the industrial company are special-purpose vehicles created to hold the PE-sponsored loans, although both Blackstone and Partners are planning to establish funds that will assume the obligations of the loans, according to DBRS.

The securitization trust will issue six series of senior and subordinate notes. The €197 million Class A notes are supported by 34.35% subordination and carry a provisional AA (low) rating from DBRS.

The two-year industrial loans used as collateral are dubbed the “Camelot” and “Logo” loans in the transaction, with Camelot sized at €215 million. The second-largest loan in the retail-center transaction is the three-year, €110 million “Bel Air” retail-properties borrowing by Partners.

The Partners Group acquisition continues a three-year run of “significantly” large investments in Italian real estate investments by the $74 billion-asset global asset management firm, according to DBRS. Partners Group is based in Switzerland.

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CMBS Blackstone Partners Group Holdings AG Europe Italy