JP Morgan, Lone Star and Oaktree in €3.2bn purchases

One of the portfolios with a par value of €2.4 billion is part-secured by commercial real estate assets in the CEE region.

JP Morgan, Lone Star and Oaktree Capital Management will purchase loan books from Commerzbank totalling roughly €3.1 billion, backed by commercial real estate in Central and Eastern Europe. The deals are expected to close by the end of June, PDI understands.

JP Morgan and US private equity firm Lone Star have been selected as the preferred joint bidders on a pan-European €2.4 billion par value loan portfolio.

Oaktree Capital has also been selected by Commerzbank as preferred bidder on a €752 million par value non-performing loan book backed by German assets.

All parties declined to comment.

The pan-European loan book is comprised of mainly performing loans secured by commercial real estate in countries such as Hungary, Romania, Turkey and the Nordic countries, as first reported by Co-Star.

The deal is the second time the duo have been selected to acquire a Commerzbank portfolio, having previously bought a €4.4 billion Spanish lending platform, Project Octopus, from the former Commerzbank subsidiary Eurohypo, in May last year.

The German real estate book is one of the first large German property NPL sales by a domestic bank since the financial crisis, as previously reported by PDI sister title Real Estate Capital.

The former Eurohypo German NPL portfolio is said to contain loans made to a total of 170 borrowers secured against 300 assets. Close to half of the book is made up of small residential exposures of up to €5 million; the remainder comprises loans secured on “larger commercial assets, although there are not many exposures above €20 million” said a source at the time. More than 20 parties expressed an interest in the loan book. Commerzbank conducted the sales without the help of an adviser, PDI understands.

The bulk of real estate deleveraging by banks in Europe, since the global financial crisis, has taken place in countries such as the UK and Ireland. As supply now dampens in those jurisdictions, there are signs of a pick-up in deleveraging in the Southern and Central and Eastern regions of Europe now, reflected by an increase in the number of transactions taking place over the last 18 months, as previously reported by PDI.