Ivanhoé Cambridge, the real estate subsidiary of Canadian institutional fund manager Caisse de dépôt et placement du Québec, has financed the £265m acquisition of Woolgate Exchange in the City of London with a circa £160m five-year senior loan from MetLife, CoStar News can reveal.
CoStar News understands that MetLife priced the loan at around 275 basis points, at a 60% LTV, a circa £10m reduction on the original interest-only £170m requested for a 64% LTV financing package arranged by Eastdil Secured, a subsidiary of Wells Fargo.
Ivanhoé Cambridge’s purchase – including £105m in equity is managed in a separate account by global private equity firm TPG – will virtually repay the entire £265.25m whole loan secured against the 340,000 sq ft trophy asset, at 25 Basinghall Street, when the deal closes in the coming weeks.
The deal is set to finally close in the coming weeks, which will pave the way for the full repayment to bondholders in the Credit Suisse-issued Cornerstone Titan 2006-1 CMBS at the January interest payment date (IPD).
MetLife fended off significant competition from a raft of lenders – including Goldman Sachs, Deutsche Pfandbriefbank, Heleba, LBBW, Wells Fargo and Santander – to finance Ivanhoé Cambridge’s TPG-managed UK trophy asset acquisition, in a process which saw terms sheets range from 45% up to 77% LTV.
All parties declined to comment.
The sale of Woolgate Exchange has been one of the more protracted trophy sales of the last two years in Europe.
D2 Private, the Irish investor, bought the City of London office block from Hamburg-based investment bank Bankhaus Woelbern in early 2006 for £325m.
But D2 Private was unable to repay the then outstanding whole loan balance of £272m by its July 2011 maturity, prompting special servicer Capita Asset Services to enlist Knight Frank and Jones Lang LaSalle in October 2011 to bring the property to market with a £290m guide price.
Knight Frank and JLL’s sale efforts yielded a £265m offer from Permodalan Nasional Bhd (PNB) in March this year, which was aborted due to the Malaysian sovereign wealth fund’s conservative view over the covenant strength of the majority lease to West LB, the German State-backed bank.
PNB’s aborted £265m purchase then prompted Irish Bank Resolution Corporation (IBRC), formerly Anglo Irish Bank, to hire Eastdil Secured in July this year to find a buyer for its junior loan secured by Woolgate Exchange, subordinate to the Cornerstone Titan 2006-1 CMBS.
Cheyne Capital Management, one of the principal CMBS bondholders in the Cornerstone Titan CMBS, then approached TPG to partner as a buyer of the original £32m B-note, which has ballooned to £40.87m due to unpaid interest, and outstanding CMBS £224.38m debt to secure ownership of the trophy asset.
After Cheyne introduced TPG to the transaction, TPG then lined up Ivanhoé Cambridge for the separate account mandate to complete the MetLife-financed purchase, with the financing mandate managed by Eastdil.
MetLife, the US insurance giant, entered UK senior debt lending in February last year, lending around £500m in its maiden year for UK property lending.
This year, MetLife’s lending tally has eclipsed last year’s lending tally least £600m of deals publicly known, including a five-year £169m senior loan to finance Hines and HSBC Alternative Investments’ £290m joint venture acquisition of the Broadgate West office development complex in the City of London.
In May, MetLife also extended a five-year £125m senior loan, as part of a two lender club with RBS, to fully refinance the specialist retail warehouse fund Hercules Unit Trust’s dual-currency REC 4 Retail Parks CMBS.
MetLife also provided a 50% share of five-year £186.6m senior debt facility with DekaBank to finance Segro and Moorfield’s £314.7m acquisition of the UK Logistics Fund in January.