Royal Bank of Scotland has refinanced Kennedy Wilson Europe’s (KWE) circa £315m Jupiter portfolio with a £184m senior loan secured by the majority of the assets formerly owned by Moises and Mendi Gertner’s Fordgate.
Kennedy Wilson was acquired the portfolio after winning the blind auction to buy the partially out-of-the-money B-Loan underneath the Fordgate Commercial CMBS loan.
CoStar News understands that KWE paid £37m for the nominal £119m B-Loan from Natixis in May, which enabled the listed opportunistic investor to place the portfolio into receivership and subsequently acquire the hard assets on an initial all-cash basis.
Last November, the portfolio was valued at £248m, almost half of its original £482.9m value in 2006, however since KWE’s £296m acquisition, which includes the purchase price of the B-Loan, the portfolio has risen in value to £314.9m, excluding the sub £10m purchase of Aspects Leisure Park in Bedford.
Cairn Capital advised KWE on the purchase of the portfolio from the legacy CMBS and the RBS refinancing.
This morning KWE confirmed in a Stock Exchange statement that the facility will draw down in full.
The Jupiter portfolio comprises 11 office assets, nine retail assets and one industrial asset, of over 2.5m sq ft and had an annualised gross rental income of circa £25.3m, with a weighted average lease term of around 7.3 years and an occupancy rate of approximately 88%.
Once the facility is fully drawn down, KWE’s LTV ratio will increase to approximately 34%, with approximately £506m of debt financing in place at the asset level and a weighted average maturity of approximately 4.6 years.
In a statement, Mary Ricks, president and CEO of Kennedy Wilson Europe, said: “The completion of this financing has enabled the company to effectively manage its balance sheet and provided significant additional flexibility to enhance future investment opportunities and manage growth prospects.”
CoStar News trailed KWE’s intention to refinance the Jupiter portfolio at the turn of the month when the company announced its maiden revolving credit facility, a £225m three-year facility split evenly between Bank of America Merrill Lynch, Deutsche Bank and JP Morgan. For details of the RCF, please click here.