DBRS Assigns Provisional Ratings to Gallerie 2013 S.R.L.

DBRS Ratings Limited (DBRS) has today assigned provisional ratings to the following classes of Commercial Mortgage-Backed Floating-Rate Notes due November 2025 (collectively, the Notes) to be issued by Gallerie 2013 S.R.L.:

-- AA (sf) to Class A
-- A (low) (sf) to Class B
-- BBB (low) (sf) to Class C

All trends are Stable.

Gallerie 2013 S.R.L. is a securitization vehicle of a single floating-rate loan made by Goldman Sachs International Bank to an Italian real estate fund (Krypton), managed by Morgan Stanley SGR S.p.A. The balance of the loan which is hedged with a borrower-level interest rate cap is €363,000,000. The purpose of the loan originated by Goldman Sachs International Bank is to provide acquisition financing to acquire the real estate portfolio.

The collateral portfolio consists of 13 shopping centres and two retail parks comprising 624 shops in approximately 200,000 square metres of leasable area. The properties are located throughout Italy. The distribution of the assets, based on base rents, is 27% in Northern Italy, 22% in Central Italy and 51% in Southern Italy. Morgan Stanley SGR S.p.A., as Fund Manager, has appointed GCI as Property Manager to provide certain property management services.

The Unitholders of the Krypton fund are Morgan Stanley Real Estate Fund VII Harmony B.V. (MSREF) and Gallerie Commerciali Italia S.p.A. (GCI) which is a wholly owned subsidiary of Groupe Auchan SA.

The final legal maturity of the Notes is in November 2025, seven years beyond the maturity of the loans. This is believed to be sufficient time to enforce and repay bondholders, given the unique security structure and the property’s jurisdiction.

Finalisation of ratings is contingent upon receipt of final documents conforming to information already received by DBRS.

Notes:
The principal methodologies applicable are European CMBS Rating Methodology, Legal Criteria for European Structured Finance Transactions, Operational Risk Assessment for European Structured Finance Servicers, Derivatives 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 sources of information used for this rating include Goldman Sachs International, Gallerie 2013 S.R.L. Limited and Savills. DBRS considers the information available to it for the purposes of providing this rating to be of satisfactory quality.

This rating concerns a newly issued financial instrument. This is the first DBRS rating on this financial instrument.

Ratings assigned by DBRS Ratings Limited are subject to EU regulations only.

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: Mary Jane Potthoff
Initial Rating Date: 19 October 2013