First Title Insurance Policies Protect Europe’s Largest-ever CMBS Transaction
August 7, 2006
The First American Corporation (NYSE: FAF), a provider of business information in the United States and a leading provider of title insurance services internationally, announced today that its wholly owned European title insurance subsidiary, First Title Insurance, plc, has provided title insurance for the largest ever multi-family commercial mortgage- backed securities (CMBS) transaction in Europe. The policies, which enabled the successful Aug. 3 close of the transaction, will protect the security agent against certain defects in title or priority that may exist within the portfolio of properties.
This €5.4 billion ($6.8 billion U.S.) debt issue, arranged by Citigroup and Barclays Capital and issued by Deutsche Annington, has been secured against 164,365 residential apartments spread throughout Germany. The debt has been secured by 800 separate mortgages, each one insured by First Title with a different policy. In this instance, title insurance played a crucial role in enhancing the rating for the CMBS vehicle. The transaction marks the first time that title insurance has ever been used for this purpose in Germany.
Commenting on the arrangement, Jeremy Meredith, vice president, Private Equity and M&A Practice, at Marsh & McLennan, said: “Marsh was pleased to assist Deutsche Annington by introducing them to First Title to a facilitate a solution. First Title’s policies improved the security to facilitate a timely closing.”
“This transaction is another great example of how title insurance can be used by real estate investors and their financiers to structure deals in better ways,” said Phillip Oldcorn, chief executive officer of First Title Insurance plc. “In Europe, title insurance can not only be used in emerging markets where land registry data is often unreliable, but also in sophisticated, mature markets such as Germany.”
Since May of 2005, First Title has established or expanded operations serving 19 European countries, including Germany, seven Central and Eastern European nations and Turkey, introducing to real estate investors and their lenders added safety and flexibility when structuring real estate transactions.
Source: The First American Corporation