JP Morgan to Securitize $467 Million in Mortgages Used to Finance Sale-Leaseback With France Telecom

Commercial Mortgage Alert reports that J.P. Morgan Chase plans to securitize 400 million euros ($467 million) of mortgages that it provided to a Morgan Stanley partnership to finance a sale- leaseback transaction with France Telecom. The deal is backed by mortgages and leases on 457 French properties - mostly telephone switching stations with some attached office space - that France Telecom sold to a partnership between Morgan Stanley Real Estate Fund and Fonciere des Regions, a Paris- based property firm.

France Telecom, Europe's second-largest telephone company, leased the properties back for six to nine years. The company agreed to the sale last year as part of a drive to reduce its debt load. J.P. Morgan beat out Deutsche Bank for the mortgage assignment. The property sales - and loans - were completed in three stages, finishing in June. A happy result of the long lag before the launch of the CMBS deal is that France Telecom's debt-reduction program has won favor with investors and analysts. This should help J.P. Morgan get better prices for its bonds, whose ratings will be tied to France Telecom's creditworthiness. S&P raised the company's corporate credit rating to 'BBB' (from 'BBB-') in May, following a series of down-grades over the previous six years. Moody's announced last month that it may upgrade its rating of 'Baa3.' Sphere: Related Content