The deal is a sign of the enormous appetite for debt that is being sold down by large banks with the ability to issue big ticket, whole loans against prime European real estate.
MetLife has bought around £100m of senior debt with Sumitomo Mitsui Trust Bank also buying a slice in the same tranche of around £30m. Blackrock bought the entire junior portion of the loan, equating to around £105m. Citi retained around a third of the senior portion, equating to around £65m.
Citi issued a five-year loan to the sponsors in May at a loan-to-value thought to be around 75%, giving the building a value of around £400m. The 445,000 sq ft building is around 90% let and a sale is expected in the next 18-24 months months. Ares and Delancey inherited the building as part of their takeover of Minerva in 2011, for which they paid £202.6m and took on around £800m of debt.
Deutsche Bank is also currently considering a £100m syndication of a junior loan as a result of its £300m refinancing of The Savoy Hotel and Barclays is syndicating a mezzanine loan of around £117m following its £335m financing of Oaktree Capital Management and Patrizia’s purchase of three UK business parks.
The syndication of the debt at the Walbrook is also a boon for Citi. This year it has financed two large trades for Blackstone – the €473m purchase of a French and German industrial portfolio from Foncière des Régions and a €350m portfolio of German offices bought from Portigon. Alongside Royal Bank of Canada and Wells Fargo it also financed Lone Star’s £5.2bn non-performing loan portfolio purchases of Projects Rock and Salt from IBRC.