Irish housebuilder Cairn Homes has increased the size of an existing €150 million debt facility provided by Allied Irish Banks (AIB) by adding Ulster Bank as a lender.
Ulster Bank has provided a commitment of €68 million to the firm. The bank, which is Royal Bank of Scotland’s Irish arm, has bought a small element of AIB’s original facility and has extended it by €50 million. The total financing by the two banks now stands at €200 million.
The amended facility has been agreed on the same terms as the original financing, which was closed last December. The loan has a term of four years and is secured against a corporate level debenture. The finance will fund acquisitions and growth, the housebuilder said.
The original facility was agreed just six months after Cairn Homes became the first Irish housebuilder to list on the London Stock Exchange for around 20 years. The firm raised €385 million through its June IPO, giving it a market cap of almost €430 million.
“Ulster Bank is pleased to support Cairn Homes and act as joint lead arranger through our commitment of €68 million in the company’s upsized €200 million debt facility with RBS supporting as agent and security agent for the facility. We look forward to working with the company and the management team over the coming years as it positions itself as a leading homebuilder in the Irish market through the construction of high quality new homes,” said Gervaise McAteer, head of commercial real estate at Ulster Bank Ireland.
“We are delighted that Ulster Bank has decided to join AIB in our banking group just three months after we announced our first senior debt facility. This increase to our existing facility secures additional flexible and efficient funding for Cairn Homes for the next four years,” said Eamonn O’Kennedy, Cairn Homes’ finance director.
“The financing will allow Cairn to provide much needed residential property development and AIB looks forward to working with Cairn over the coming years,” added Derek O’Shea, AIB’s head of land and development lending.
Last December, Cairn Homes partnered with Lone Star to buy a portfolio of real estate loans from Ulster Bank. The Project Clear portfolio contained €2 billion of debt secured by residential development land in and around Dublin. The book was sold for €503 million, of which Cairn contributed €378 million for its share of 75 percent of the portfolio.
Cairn Homes said that it plans to develop more than 14,000 new homes on the sites with an expected net development value of more than €2 billion.