Tipologías del folklore

STOREs Securitisation Pty. Ltd. (STOREs) issued in May 2004 CMBSs worth AU$220 million, which were supported by first-registered mortgages over forty-four bulky goods retail outlets in Australia trading as “Harvey Norman” or “Domayne”. Concurrently, a similar issue occurred in New Zealand, with the securities supported by ten Harvey Norman stores. The two programs were cross collateralised within each jurisdiction and across both jurisdictions. The program was designed to issue both short-term-notes and medium-term-notes. Figure 4.7 shows the transaction structure of STOREs Pty. Ltd.

Figure 4.7: STOREs Pty. Ltd. Series Transaction Structure

Source: Standard and Poor’s (2004b) Property-leasing

Companies Australia and New

Zealand Banking Group Ltd. (Swap Provider) P.T. Ltd. (Borrower Security Trustee)

Medium-term Notes Short-term Notes

STOREs Securitisation Pty. Ltd. (Issuer) Harvey Norman Holdings Ltd (Borrower) Property-owning Companies

ANZ Capel Court (Issuer Manager) Perpetual Trustee Company Ltd. (Security Trustee) STOREs (NZ) Ltd. (NZ Issuer) Loan Relationship Supporting Cross Collateral Australia and New

Zealand Banking Group Ltd. (Liquidity Provider)

Australian and New Zealand Banking Group

Ltd (Backstop Facility

Provider)

Harvey Norman Properties (NZ) Ltd.

New Zealand Properties Australian Properties (Held by Individual Companies) Franchisees Leasees Loan

100 Details of the STOREs Pty. Ltd. CMBS issue are shown in Table 4.7. This is the first multi-jurisdictional CMBS issue covering Australia and New Zealand issued in Australia, with provision to issue medium and short term notes.

Table 4.7: STOREs Pty. Ltd. Issue Details

STOREs Pty. Ltd.

Issue Date: May 2004

Term-to-Maturity: 5 years

Property Type: 44 bulky good retail outlets throughout Australia and 10 in New Zealand Aggregate Market Value: AU$479.6m (Australian

properties)

NZ$88.7 (AU82.7m)(New Zealand properties)

Issue Size: AU$220m

Tranche: AMOUNT LTV DSCR BBSW

AAA AU$150m 35.7% 2.7 39bp

AA AU$40.0m 45.2% 2.1 52bp

A AU$30.0m 52.4% 1.8 70bp

Interest Type: Floating

Occupancy Rate: 100%

Liquidity Facility: AU$24m or 11.4% of issued debt

Refinance Constant: 9.5%

Property Diversity: Largest two properties represent 17% of portfolio value Geographic Diversity:

New South Wales 52%

Queensland 10% Western Australia 10% ACT 7% Victoria 11% Tasmania 4% South Australia 6%

Herfindahl Property Type Index (HHPT): 1.000 Herfindahl Geographic Region Index (HHGR): 0.313

Source: Author’s compilation from Standard and Poor’s (2004b)

Details of the properties backing STOREs Pty Ltd. are shown in Table 4.8. There are high levels of cash flow coverage derived from rent from franchisees and external tenants. Generally, there are between three and six franchisees within each store. The licence to the franchise is for one-month rolling term with the licence fee payable monthly in advance. Licence fees are increased by 3% and operating expenses are borne by the franchisee. Each store’s administration manager handles day-to-day management

101 of the properties. Franchisee rent is split into three elements: retail, ancillary warehouse, and administration area.

Leases to external tenants are for traditional lease terms of between three and five years with a mix of fixed and market rental reviews throughout the term. About 12% of cash flow is derived from external tenants.

Table 4.8: STOREs Pty. Ltd. Property Portfolios

State No. of Properties Market Value (AU$m) Income (AU$000) Franchisees External Tenants

New South Wales 19 249,950 21,558 110 18

Victoria 6 47,475 4,044 31 5

Western Australia 5 54,400 5,043 33 4

South Australia 3 28,400 2,543 17 1

Queensland 7 48,200 4,298 39 4

Australia Capital Territory 2 32,350 3,160 17 1

Tasmania 2 18,850 1,828 14 1

Australia 44 AU$479,625 AU$42,465 261 34

New Zealand 10 NZ$88,680 NZ$8,711 10 3

Source: Standard and Poor’s (2004b)

In line with Standard and Poor’s (2004b), the following are deduced as strengths, weaknesses and mitigants of the issue:

iv) Strengths:

• The portfolio is well diversified with 44 bulky goods retail properties with a good mix of size, styles, and ages located throughout Australia. In addition, there are 10 bulky goods retail properties located in New Zealand which may support the notes issued by STOREs and STOREs (NZ). The issue has a HHGR of 0.313.

• The underlying assets tend to be in highly visible, highly trafficked areas that are well suited to retail businesses.

• Bulky goods retailing has established itself as a strong performing real estate asset class in Australia and New Zealand.

• The Harvey Norman and Domayne names are well known, established retail brands that provide a unique retail concept in Australia; and there are no directly comparable bulky goods retailers in Australia or New Zealand.

102 • Excess spread is trapped in the event of a borrower event of default, which may create additional reserves for debt service, property and capital expenditure, and issuer expenses.

v) Weaknesses

• The underlying franchise agreements are for monthly terms only.

• The franchisees rely heavily on the support and systems of Harvey Norman Holdings Ltd. (HNHL). If the franchisees cease to have access to these systems, there may be significant disruptions to cash flow.

• The underlying household goods retailing business is susceptible to fluctuations in general economic conditions and interest rate movements. • The properties are generally configured to suit a larger retailer. If any of the

properties have to be relet, there may be limited demand for alternative occupiers.

• The Australian and New Zealand programs are cross collateralised and, as such, a default in one jurisdiction will cause a default in the other jurisdiction.

• The two largest properties represent around 17% of the secured pool.

vi) Mitigants:

• The properties are readily capable of being sub-divided, which is useful in determining alternative use in the event of a sale after loan default.

• The conservative LTV afforded by the collateral at 31.7% to 52.4% and DSCR of 1.8x to 2.04x.

• The liquidity facility of AU$24 million is enough to cover twelve months of coupon and priority payments.

The issue was fully subscribed, with the AAA notes priced at 39 bp, AA notes at 52 bp and A- notes at 70 bp over 3 month BBSW. Final maturity of the notes is November 2010.

103