Danske Bank, a prominent investor in the European securitization market, is looking to increase its exposure to bridge loans that will be securitized in the future either through a whole business deal or another type of securitization. Ian Feinson, London-based head of structured bonds, says, "We have the appetite and the fire power to participate in the sector."
Dankse has no set limits for bridge loan investments and in certain circumstances will to invest up to £500 million per deal. More often though, they are looking at finding opportunities between £100-250 million. Feinson buys single-A and triple-B rated securitizations for the bank's balance sheet. Danske Bank is a buy and hold investor. Feinson declined to specify the amount of assets he manages.
One of the reasons Dankse is so interested in bridge loans is it has the ability to invest in all areas of a transaction when it turns into securitization, says Feinson. "We've done the credit work previously and can invest in the entire spectrum of the whole business transaction," says Feinson. Dankse also has a $1.3 billion conduit that invests in triple-A paper.
Specifically, Danske is looking to buy non-cyclical industries, such as water and pub companies that have stable and predictable cash flows as well as high barriers to entry. Feinson hopes to get more exposure to new issuers and portfolio diversification.
Dankse is also interested in commercial mortgage-backed securitizations linked to shopping centers. Feinson says there is good demand from outlets to get into shopping centers. In addition, there are barriers to entry to the market: "You just can't put up a out-of-town shopping center," he notes. Feinson pointed to an upcoming CMBS deal from Deutsche Bank as the type of issue that interests him.
