UniCredit heads line-up for €430m Milan refinancing

Italian, French and US banks team up for €430m refinancing in the low 200bp

rsz_unicredit-tower_p3UniCredit is leading a five-bank consortium in a €430m refinancing of its own group headquarters in Milan. The bank is taking 50% of the ticket for Qatari-backed developer Hines Italia, to finance the 32-storey UniCredit Tower and six other grade-A buildings. Also in the line up are Italian bank Intesa Sanpaolo, French banks BNP Paribas  and Société Générale, and investment bank Bank of America Merrill Lynch.

The loan margin is believed to be in the low 200s – even keener than market sources expected in the Spring, when the mandate was launched. It shows how strongly lending appetite has returned for financing prime assets in Italy. Goldman Sachs, Citigroup and Deutsche Bank also showed interest in the deal, which had even been pinned as a potential securitisation.

But the financing panned out as a club deal rather than going to an investment bank to be sold down because “the sponsor didn’t want a CMBS”, said one of the participating lenders. It also did not want to disappoint up to five banks when “there were only a few basis points in it”, the source added. The assets are at the heart of the 3.5m sq ft Porta Nuova Garibaldi business district, which Hines Italia is developing.

The refinancing of seven grade-A buildings plus 803 parking spaces, valued at €800m-€1bn, is code-named ‘Desiderata’. It required non-recourse senior debt at a 50% loan-to-value ratio over five  or seven years, with no amortisation or prepayment fees, as part of a financing that allows for an allocation of €10m for VAT as well as €40m for capital expenditure.

Banca IMI, Mediobanca and John Carrafiell’s GreenOak are handling the process. With ever-cheaper bank finance more widely available, borrowers are split on the merits of CMBS and Hines Italia is not the only large sponsor to prefer a bank club. Others are not ruling out CMBS if the pricing works. Westfield is considering it as an option for refinancing its 1.9m sq ft mall in Stratford, east London. Last year Goldman Sachs securitised a loan secured on a portfolio of Italian hypermarkets and other retail assets and both Deutsche Bank and Goldman have other potential Italian deals in the pipeline.