German bank Eurohypo is preparing its first non-U.K. commercial mortgage-backed securitization, to be backed by collateral from the Netherlands. The bank plans to issue five CMBS deals worth more than £2 billion before the summer, two of which will be euro-denominated deals.
"We are now seeking to translate out experience with sterling issuance into euro-denominated transactions," said Peter Denton, London-based managing director responsible for origination. Eurohypo has already issued four CMBS deals to the tune of £1.8 billion through its Opera conduit, all of which have been backed by U.K. collateral.
A recent reorganization within the bank will boost cooperation between the loan origination and securitization teams, said Caroline Philips, managing director of securitization. The bank recently created a European debt capital markets division, which includes securitization, syndication and large loan structured finance. Instead of running its own income statement, the new group is purely a cost center and any income from real estate deals it books goes to whichever of the bank's 27 European branches originated the loans being used as collateral. "The branches didn't have any real incentive to direct assets to us; now, if the assets are right and would work better in the bond market rather than the bank debt market, branches will be motivated to capture this advantage by routing assets to our securitization team and booking the profit to their own P&L," said Philips.
The bank has hired four CMBS professionals recently to further support the expansion of the business (BW, 3/14).