Recent property lending deals

  • Liquidity in European debt finance markets continues to increase. One sign is the rising number of large loan underwritings by single banks, often followed by syndication to a small group of lenders/investors. A year ago £100m was a large underwriting for one bank; now it is more like £300m.
  • For example, Morgan Stanley underwrote a £375m loan for The Mall Fund, while Natixis arranged a €406.4m refinancing for a CBRE retail fund and then placed the debt with three other lenders.
  • The largest loan agreed in the past month was a cool £2bn, funding Lone Star’s £3.5bn winning bid for Irish Bank Resolution Corporation’s Rock and Salt non-performing loan portfolios.
  • Some 75% of the 1,425 loans sold by IBRC are secured against property in the UK, but the trio of banks that are financing the transaction – Royal Bank of Canada Capital Markets, Citi and Wells Fargo – all have strong relationships with Lone Star via their businesses in the US.
  • In the UK, DekaBank’s accepted offer for financing Sixty Holborn in London EC1, at a margin a shade under 150 basis points, is seen as the latest example of the continuing downward pressure on margins for prime buildings, though the leverage is low, at a loan-to-value ratio under 50%.
  • The scheme, which is let to Amazon, was not a straightforward, dry financing and there is said to be a deduction on the loan to cover the rent-free sweetener that has been agreed with the tenant.

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