JPMorgan syndicates south east European mezzanine loan

JPMorgan has syndicated the mezzanine tranche of a circa €200 million whole loan which it underwrote for Lone Star’s €328 million acquisition of property company Centrice from bad bank Heta, in June.

The buyer of the €35 million mezzanine slice is Austrian bank Bawag, which invests in real estate in higher yielding senior, mezzanine and whole loans across Europe.

The pricing achieved for the mezzanine is believed to be just under 800 basis points, in the high 700s bps.

Austria’s distressed bank Heta owned Centrice Real Estate, which invested in south eastern-European property, mainly in Slovenia and Croatia. Heta Asset Resolution unloaded the company with its portfolio and its debt to Lone Star in a share sale which completed at the end of June after a near year-long sales process.

JPMorgan underwrote the acquisition finance for Lone Star even though the assets were in new jurisdictions for the bank. It has shown itself prepared to lend across Europe for the right sponsors.

Its relationship with Lone Star is close. The US bank has won three large European performing/non-performing loan portfolios in partnership with the US private equity fund: Project Octopus, mainly Spanish assets acquired from Commerzbank in 2014; Project Parrot last year, a pan-European portfolio of loans in 14 countries, also from Commerzbank; and most recently, Dutch bad bank Propertize’s Project Swan, which the pair clinched in June.

JPMorgan has been taking the performing elements of the portfolios and financing Lone Star’s purchase of the non-performing books.

Centrice is headquartered in Vienna with regional offices in Ljubijana, Zagreb and Belgrade. At the time of the sale, it had 31 retail and office properties including seven Slovenian malls anchored by the Qlandia supermarket chain. It also included the 30,000 sq metre Ljubljana headquarters of Heta’s Hypo Alpe Adria Bank.