Lloyds Bank has sold a £50m slice of a two-tranche circa £225m senior loan secured by Quercus Healthcare Property Partnership to BAWAG, the Austrian lender majority-owned by Cerberus Capital Management.
Quercus Healthcare Property Partnership, the joint venture partnership between Aviva Investors and Quintain Estates, comprises assets in two areas of focus: nursing/care for the elderly and the care of younger adults with learning disabilities or specialist needs.
Lloyds underwrote the two-tranche circa £225m senior loan, comprised of an non-amortising £150m tranche and a £75m fully amortising tranche, and has sold a £50m tranche of the fully amortising tranche to BAWAG.
CoStar News understands that the margin is just north of 400 basis points, while the original 180-strong property portfolio was valued at around £430m at the time of Lloyds refinancing. Since which time, piecemeal asset sales have reduced the portfolio to sub 160 properties, enabling the amortisation schedule.
Separately, Lloyds Bank has recently underwritten a £380m senior loan to refinance The Yianis Group’s property portfolio.
For BAWAG, the Quercus participation is in keeping with its lending business model of finding senior loans in the circa 400 bps margin range – a challenge which is increasing with the passing months, albeit this deal is evidence that they can still be found.
Last December, BAWAG participated in a €97.5m five-year senior loan for Ivanhoe Cambridge and Grupo Lar’s Islazul, alongside West Immo and Natixis. CoStar News understands that the €97.45m reflects a 50% LTV and the loan was priced at 425 basis points over Euribor.
Ben Stirling, managing director, European Direct Real Estate Alternatives at Aviva Investors said in a statement: “I am delighted that BAWAG has joined Lloyds in the Quercus facility. It reflects the growing market confidence we are experiencing in the care home sector after some difficult years and underpins our investors’ decision to extend the Quercus fund term out to 2018.”
John Feeney, managing director and global head of corporate real estate at Lloyds Bank said: “We are delighted to welcome BAWAG into the Quercus facility.
“Liquidity and demand for the healthcare sector continues to improve in line with the underlying fundamentals and the management team at Quercus has worked hard to face into the headwinds experienced in recent years. The syndication to BAWAG reflects Lloyds Bank’s ongoing focus on an originate-to-distribute strategy.”
Also in the press statement, Toby Sharp, director, international real estate and special situations at BAWAG P.S.K. said: “We are very pleased to partner alongside Lloyds in this transaction and to work with such a high calibre and experienced sponsor.
“Although we have funded into the care home sector in Germany, this is our first healthcare deal in the UK which has helped us further diversify our growing loan portfolio.”