DBRS Confirms Ratings on German Residential Funding 2013-1 Limited

DBRS has today confirmed the ratings on the following classes of Commercial Real Estate Loan Backed Floating-Rate Notes due 2024 issued by German Residential Funding 2013-1 Limited:

-- Class A at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (sf)
-- Class D at BBB (sf)
-- Class E at BBB (low) (sf)

All trends are Stable.

The transaction consists of four fixed-rate loans and two floating-rate loans, which as of the May 2014 quarterly reporting, had a total balance of EUR 2,074,696,541, representing collateral reduction of 1.36% since issuance in June 2013. The loans are cross-collateralized and cross-defaulted and each was made to two borrowers, both of which are subsidiaries to the sponsor, GAGFAH S.A. (GAGFAH).

As of the May 2014 reporting the collateral portfolio consisted of 61,090 residential units, 512 commercial units, 11,991 parking units, one senior unit and 1,379 other units, with the residential and commercial units comprising a total leasable area of 3,865,957 square metres. Since issuance, 579 residential units have been sold, nine commercial units have been sold, 129 parking units have been sold and 216 other units have been added as collateral. The portfolio reported physical vacancy of 4.2%, down from 4.4% at YE2012. Financial performance remains stable as the portfolio reported a May 2014 net operating income (NOI) of EUR 162.95 million, an increase of 6.3% compared with November 2013 NOI. The resulting projected debt service coverage ratio (DSCR) was 2.14 times (x) for May 2014 and 2.09x for November 2013. At issuance, senior subsidised debt in the amount of EUR 247.0 million was permitted to be secured by the portfolio properties; however, this debt was not securitised in the trust. As of March 31, 2014, this debt balance had been reduced to EUR 225.1 million.

The portfolio collateral is located across over 100 communities in Germany, with the largest concentration located in Berlin. Other notable property concentrations are situated in Hamburg, Cologne, Bielefeld and Essen. GAGFAH is an experienced owner and manager of multifamily residential real estate in Germany and has a portfolio of approximately 180,000 residential units.

Notes:
All figures are in Euros unless otherwise noted.

The applicable methodologies are European CMBS Rating Methodology, European CMBS Surveillance, Legal Criteria for European Structured Finance Transactions and Unified Interest Rate Model for European Securitisations, which can be found on our website under Methodologies.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.