CarVal Investors, in a joint venture with Arrow Global, has agreed to buy a Dutch mortgage bank subsidiary of Rabobank with a €1.7 billion real estate loan portfolio.
CarVal and Arrow’s Dutch platform, Vesting Finance, are to buy the real estate financing activities of RNHB Hypotheekbank. The bank is being sold by FGH Bank, which is part of Rabobank.
The company is currently part of the Rabo Vastgoedgroep. It is a buy-to-let and mid-market commercial real estate lending business focussed on the Netherlands. The bank is active in the market under its own brand and has a platform which can originate and service loans. Its customers are mainly small to mid-sized investment firms and independent investors, as well wealthy individuals.
CarVal and Arrow are to buy the entire RNHB Hypotheekbank organisation, including its 60 personnel and its loan book which comprises 9,300 loans with an aggregate face-value of €1.7 billion.
The average loan-to-value across the portfolio is 66 percent. The loans are predominantly performing secured loans mainly for buy-to-let residential and mixed-use properties, with some industrial, retail, leisure and office properties.
UK-based Arrow, which buys and manages European debt portfolios, said that it has agreed to enter into a five-year servicing agreement and will service the entire book. It will also co-invest in the portfolio, with a minority interest of €25 million.
Arrow added that the investors will secure non-recourse leveraged finance to part-fund the deal.
CarVal intends to run the business as a going concern and will lend to new and existing customers. In an announcement, Rabobank said that CarVal and Vesting are “committed to continue to serve RNHB’s customers and are counting on RNHB’s employees to help further grow the business in the future”.
Rabobank added that the sale of the RNHB Hypotheekbank organisation is in line with its strategy to reduce the size of its balance sheet.
The transaction is expected to close at the end of 2016.