Bondholders of a CMBS vehicle secured against a Karstadt department store portfolio have given approval for a major debt restructuring, giving some breathing room to the landlords after the German retailer filed for insolvency in June last year.

A spokesperson for Highstreet, a joint venture of Goldman Sachs and Arcandor, the investment company that owns the majority of the Karstadt stores, told PropertyEU that the EUR 1.2 bn bond notes were 'successfully' restructured last Thursday with a consortium comprising as many as 50 creditors.

The operation is one of the largest CMBS restructurings of its kind and is the first European CMBS restructuring proposal that includes an extension of the legal final maturity of the notes. As a result of the agreement, the maturity of the bonds has been pushed forward by another three years, with repayment now due in 2017. 'Creditors will have a better margin on the deal, as the cost of credit has increased from 53 bps over Euribor to 85 bps over Euribor at present,' the spokesperson said.

Under the agreement, bondholders will be the first to get their money back in case some of the real estate is sold, he added. 'But Karstadt's administrators believe that this operation will allow it to find a buyer for the entire Karstadt company, enabling it to remain as main tenant in the portfolio,' the spokesperson said.

The landlords are a consortium of Goldman Sachs' Whitehall Funds (51%), Deutsche Bank's RREEF funds (24%), Milan-based Pirelli Real Estate (12%), Generali (11%) and the Borletti Group. The investors own a portfolio of 95 properties occupied by Karstadt including 45 Karstadt stores, plus about 50 Karstadt car parks, offices and logistics properties across Germany.