Thinktank announces inaugural commercial mortgage backed securitisation

June 30, 2014 - PRLog -- Think Tank Group Pty Ltd (“Thinktank”) has today successfully closed its inaugural commercial mortgage backed securitisation (“CMBS”) transaction of $113.6 million, “Think Tank Series 2014-1”.

This marks Thinktank’s initial capital markets term issue and represents the first pure small ticket CMBS transaction in Australia since 2007. “It is a significant transaction for our business as well as for asset backed issuance in the local market and has been achieved through the combined efforts over an extended period of a number of parties,” commented Jonathan Street, CEO of Thinktank.

The transaction has been assigned final ratings from Standard and Poor’s. The AUD28.4m Class A1 Notes and the AUD52.3m Class A2 Notes are rated AAA(sf). The AUD11.2m Class B Notes, the AUD7.5m Class C Notes, the AUD4.4m Class D Notes, the AUD3.5m Class E Notes and the AUD2.3m Class F Notes have assigned ratings of AA(sf), A(sf), BBB(sf), BB(sf) and B(sf) respectively. The transaction also provides for an unrated Class G Note of AUD4.0m.

The Class A1 Note carries a weighted average life of 0.7 years and priced at BBSW30 + 150bps. The rated Notes were placed privately between Deutsche Bank AG, Sydney Branch and a major domestic institution with a highly respected capital markets presence. A portion of the Class F Notes and the entirety of the Class G Notes were retained by interests within the Thinktank group.

Deutsche Bank acted as Arranger on the transaction while also acting as Joint Lead Manager along with Commonwealth Bank of Australia.

Mr Rob Verlander, Head of Debt Markets Securitisation at the Commonwealth Bank of Australia, commented, “This transaction demonstrates the strength of the current market and the growing interest in asset classes outside residential mortgages. Thinktank has shown it can successfully access the capital markets and we lookforward to working with Thinktank to broaden its investor base in the future”.

Mr. Street commented further, “The successful completion of this transaction has been made possible through the long standing support and guidance of our JLM, Commonwealth Bank of Australia. We look forward to keeping interested parties in the market apprised of the progress and performance of Think Tank Series 2014-1 and to repeat issuance in the future as our assets under management continue to grow.”

The Thinktank portfolio of first mortgage commercial property advances supporting the transaction comprises 310 loans with an average size of $366,000 and a weighted loan to valuation ratio (“LVR”) of 64%. Distribution by property type shows 29.5% retail, 49.7% industrial and 15.5% office, with 59.8% located in NSW, 12.6% Victoria and 10.8% in Queensland. The loan advances, predominantly to self-employed SME borrowers, comprise 62% full documentation, 25.9% alternate verification and 12.1% low documentation. Loans to owner-occupier borrowers make up 54.8% while the weighted average seasoning on the portfolio is 34 months.

Thinktank originates nationally through a network of individually accredited, professionally registered finance brokers.

Thinktank was advised by RML Advisory, a firm with local and global experience in CMBS and ABS.

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