DBRS Confirms Ratings of Florentia Limited

DBRS Ratings Limited (DBRS) has today confirmed ratings for the following classes of Commercial Real Estate Loan Backed Floating Rate Notes due 2024 (collectively, the Notes), issued by Florentia Limited:

-- Class A at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (sf)
-- Class E at BBB (low) (sf)

Florentia Limited is the securitisation of two groups of loans. Each of these groups comprises loans to seven different borrowers, all of which are subsidiaries of the sponsor, Vitus Immobilien S.a.r.l. (Vitus).

The primary collateral for the transaction originally consisted of 28,859 residential multifamily units and 330 commercial units, and as of the June 2013 reporting, the collateral consists of 29,808 residential units and 325 commercial units, as a result of unit sales since the transaction closed. The portfolio continues to perform well and has experienced cash flow growth since the transaction closed. On an annualized basis, the portfolio cash flow was reported at EUR 75.5 million, compared to the YE2011 cash flow of EUR 68.7 million that was provided at issuance. Further, the overall portfolio vacancy rate has improved from 4.4% as of December 31, 2011, to 3.7% as of September 30, 2013.

All of the properties are located in Germany, primarily in the north and west of the country. The portfolio benefits from the property management expertise provided by Vitus and its dedicated team of real estate professionals.

The final legal maturity of the Notes is in October 2024, seven years beyond the maturity of the loan. This is believed to be sufficient time to enforce and repay bondholders given the unique security structure and the property’s jurisdiction.

Notes:
The principal methodologies applicable are the European CMBS Rating Methodology, European CMBS Surveillance, Legal Criteria for European Structured Finance Transactions and Unified Interest Rate Model for European Securitisations, which can be found on www.dbrs.com under Methodologies.

The primary sources of information used for this rating include Situs, Deutsche Bank AG, Vitus Immobilien S.a.r.l. and Jones Lang LaSalle. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

For additional information on this rating, please see Linking Document - European CMBS under Related Research to the right or by contacting us at info@dbrs.com.

Lead Analyst: Scott Goedken
Rating Committee Chair: Erin Stafford
Initial Rating Date: 25 September 2012

The full report providing additional analytical detail will be posted shortly and will be available by clicking on the link under Related Research at the right of the screen or by contacting us at info@dbrs.com.