German banks and Blackstone lend €600m on Paris tower

Beacon Capital Partners France has refinanced the country’s tallest office tower through a €600m refinancing package from pbb Deutsche Pfandbriefbank, Aareal Bank and Blackstone Real Estate Debt Strategies.

A maturing loan secured against First Tower in Paris’s La Défense business district, was replaced with €515m of senior debt and an €85m mezzanine loan.

The 758 ft skyscraper, once home to AXA Insurance before an extensive redevelopment which concluded in 2011, was originally financed at high leverage by pbb in 2007. The bank renewed and extended the €600m facility in July 2010, and arranged the loan’s refinancing again in June this year at a lower senior debt LTV than previously.

pbb Deutsche Pfandbriefbank brought in Aareal Bank as co-underwriter on the senior, which was split 50/50. The all-in cost of debt on the five-year senior loan loan represents a good return for the senior lenders, according to one of the originators, partly because of the financing’s history and Deutsche Pfandbriefbank’s support through the cycle.

Beacon Capital’s Paris office is run by Jean-Marc Besson, although it was a relationship between the group’s New York office and Blackstone Real Estate Debt Strategies that sealed BREDS’ selection as mezzanine partner. The mezzanine debt at a 70-75% LTV was originated by the fund’s European team, led by Rob Harper in London.

Deutsche Pfandbriefbank and Aareal recently teamed up on another Paris refinancing over the summer for a mutual client, jointly underwriting a €228m senior loan for a prime property portfolio of 23 mainly office and retail assets in Paris’s CBD for Aerium’s Cardinal fund.