Profits still puzzling but Deutsche Bank blazes 17g5 trail
Deutsche Bank’s Merry Hill CMBS — still only the second true CMBS backed by a European asset since the crisis — has left market participants wondering whether the German bank lost money on the trade. Despite the questionable economics though, the deal boasts a string of innovative features such as US distribution and full 17g5 compliance.
In Merry Hill all the notes were sold below par a recognition that the underlying loan, paying a margin of 245bp, could not support a blended margin of 363bp.
All note classes featured a 227bp coupon, but the class A notes sold at 97.04%, giving a discount
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