Italy Office 2017: 20 December 2018
Although the deal name suggests the transaction came to market in 2017, the closing date for this issue was actually 17 December 2018.
The principal source of payment of interest, principal and other amounts in respect of the Notes will be the collections and recoveries made in respect of the Loan Assets. The Loan Assets comprise: (i) the Receivables arising out of (a) Term Facility A, Term Facility B and Term Facility C drawn by the Borrower on the First Utilisation Date and (b) Term Facility D and Term Facility E drawn by the Borrower on the Second Utilisation Date; and (ii) 95% of the Capex Facility (which is, as at the date of the Offering Circular, not yet utilised by the Borrower), each granted under the facilities agreement entered into by, amongst others, JPMorgan Chase Bank NA Milan Branch (the Originator), and the Borrower.
The collateral for this transaction comprises six office assets in total – five located in Milan and one located in Rome. As at 28 May 2018, the Property Portfolio has 66,640sqm of gross lettable area (GLA) with a Gross Income of €6,046,432, which translates to a Net Income of €4,000,581. CBRE's (the Valuer) aggregated valuation of all six properties in the Property Portfolio is €224,700,000 (the Market Value). As at 28 May 2018, approximately 51% of the GLA was occupied. The Property Portfolio's main tenant is Pirelli & C SpA, with a lease contract expiring on 22 December 2032 (and break option on 22 December 2028). Pirelli contributes 81% of the total gross rental income as at 28 May 2018. Other tenants include Allianz SpA (although the tenancy expires on 30 June 2018), Marionnaud Parfumers Italia SpA and Cariparma – Credit Agricole SpA (expected to vacate by 30 June 2018).
EU Risk Retention: J.P. Morgan Securities plc, as originator for the purposes of Regulation (EU) No 575/2013 (the CRR), Regulation (EU) No 231/2013 (the AIFM Regulation) and Regulation (EU) No 2015/35, will retain a material net economic interest of not less than 5% in the securitisation. At the Issue Date such interest will comprise the Class R Notes, which will equal no less than 5% of the nominal value of each Class of Notes (and each Retention Tranche is equal to at least 5% of the nominal value of the Retention Tranche and the corresponding Class of Notes) sold or transferred to investors on the Issue Date.
US Risk Retention: The Originator intends to satisfy the U.S. Credit Risk Retention Rules by causing J.P. Morgan Securities plc, a majority-owned affiliate of the Originator within the meaning of the U.S. Credit Risk Retention Rules, to acquire on the Issue Date and retain an eligible vertical interest in the form of a single vertical security that entitles its holder to no less than 5% of amounts payable under the Notes (an EVI). The EVI will comprise 100% of the Class R Notes.
Compare/contrast: Pietra Nera Uno Srl, Taurus 2018-1 IT Srl