Lloyds Banking Group has completed another large refinancing for a private property company client’s UK portfolio.
The bank has provided a new £210m five-year loan to David Pearl’s Structadene Group, replacing an existing facility provided by the bank. The deal has been priced at around 250 basis points at a conservative loan to value ratio, and the portfolio includes more than 170 commercial and mixed-use properties in London and the South East.
The restructuring of the previous facility is understood to have created a simpler arrangement and involved replacing swap arrangements. Structadene and its loans issued by Lloyds have remained in the bank’s “good book” throughout the downturn rather than being dealt with by its Business Support Unit that deals with distressed situations.
Mark Hurst, head of real estate at Hamlins, which advised Structadene on the refinancing said: “[This] proactive refinancing will position Structadene well to enable it to grow in the coming years. We are continuing to see a surge in refinancing of portfolios amongst our real estate clients which is reflective of the debt market coming alive again in the real estate sector.”
In June, Lloyds refinanced John Christodoulou’s London property company, the Yianis Group, issuing a five-year loan and a shorter maturity facility, together totalling £380m. The new loans replaced £400m of existing facilities with different maturities and legacy swap positions and put the debt on standard market terms.
Structadene’s annual results to 30 September 2013 showed the group had decreased its total net debt by £78m to £542.9m and Pearl said that “Our five-year plan to reduce debt and improve cash flow has met all our objectives, resulting in much improved debt service cover and gearing levels, and generating meaningful surplus cash”.
The company sold aggressively during the downturn in 2011 and 2012 in order to cut its gearing, with the nationalised Allied Irish Bank having also been one of its major lenders.
In October last year Structadene, alongside its joint venture partner Continental Resources Development Corporation, sold 431-451 Oxford Street, London W1, to clients of Tribeca Holdings for £130m, after the Irish Bank Resolution Corporation called in the loan held against the prime block.