AIG Asset Management has agreed a £900m secured debt facility to Market Tech, the company which owns the Camden Market estate in North London.
The US insurer’s facility has an initial term of 10 years and comprises a £300 million term loan to be drawn immediately, with a further £100 million to be drawn down in May 2016. A further £50 million is available to the firm until December 2017. Future draw-down pools of £300 million and £150 million are also available.
Market Tech is majority owned by Israeli billionaire Teddy Sagi. The firm owns a 14-acre estate at Camden Market, which was assembled in the last two years, as well as three e-commerce businesses. As at 30 September 2015, Market Tech’s property portfolio was valued at £866.7 million, up 15 percent on the previous six months.
The new loan will be used to repay existing debt with Nomura International and Bank of Cyprus totalling £202 million. An undrawn £60 million working capital loan from majority shareholder Citwax will be cancelled.
AIG’s initial facility has an opening margin of 1 percent per year above the 10-year sterling swap rate, fixed at 1.88 percent. The margin will increase to 1.5 percent after two years, then to 1.75 percent after 30 months and 2.2 percent after 36 months for the remainder of the term. The average margin for the initial facility over the term of the agreement is around 1.9 percent per year.
The future draw-down pools of £300 million and £150 million, as well as the £50 million additional loan within the initial facility, will carry a margin of 2 percent above the 10-year sterling swap rate, fixed at the date of drawdown
Market Tech said that the drawdown of the initial £300 million will set the group’s loan-to-value ratio at 35 percent.
“The facility provides the company with stable long term funding, enabling us to drive shareholder value by delivering on our medium and long term acquisition and development strategy,” said Charles Butler, CEO of Market Tech Holdings.
Market Tech’s property ownership comprises the Stables Market, Union Street Market, Camden Lock Market and Hawley Wharf. It also owns properties on Camden High Street, Kentish Town Road, Jamestown Road, as well as the Interchange Building on Oval Road, Utopia Village in Primrose Hill, 1-11 Hawley Crescent and 49 Chalk Farm Road.
UBS Investment Bank advised Market Tech as lead adviser.