Advising pbb on SRT transaction with Oaktree involving a U.S. loan portfolio of approximately USD2 billion

The transaction focuses on the synthetic protection of the mezzanine tranche of a performing U.S. loan portfolio of pbb with a notional amount of approximately USD320 million. The underlying portfolio predominantly comprises loans secured by office properties with an aggregate volume of around USD2 billion.

With this transaction, pbb has reached a key milestone in implementing its strategic exit from the U.S. market. The protection enables rapid and efficient risk transfer for roughly 16% of the underlying portfolio, while also underscoring the continued robustness of the European SRT market for structured capital relief solutions in the commercial real estate sector.

The SRT transaction involved Oaktree subscribing to an interest-bearing, secured credit-linked note issued by pbb. As a purely synthetic arrangement, pbb is protected against potential losses on the subordinated tranche while maintaining its senior exposure to the majority of the performing U.S. portfolio.

The A&O Shearman team was led by partner Dr. Stefan Henkelmann and senior associate Faria Fagirzai (both Capital Markets, Frankfurt). The team also included partners Martin Scharnke (Capital Markets, Frankfurt), Dr. Heike Weber (Tax, Frankfurt) and Lorenz Haselberger (Tax, New York); counsel Jens Nollmann and Daniela Schmitt (both Capital Markets, Frankfurt); Sahar Kianfar (Capital Markets, London/San Francisco); and Jo Goulbourne Ranero (Banking Regulatory, London). Additional team members were senior associates Robert Simmons and Louise Weir (both Capital Markets, London), associates Johanna Ribbe (Capital Markets, Frankfurt) and Felix Palmqvist (Tax, Frankfurt), as well as senior business lawyers Corinna Dreyer and Mirja Hinrichs (both Capital Markets, Frankfurt).