Lone Star is refinancing a portfolio of Dublin offices, including Iveagh Court Complex and 75 St Stephen’s Green, and is seeking up to €400m in a five-year term senior or whole loan.
Eastdil Secured has been appointed to refinance several major assets within Lone Star’ Project Holly portfolio as part of a wider portfolio including Dublin offices acquired from IBRC, AIB and the 75 St Stephen’s Green loan acquired from RBS back in December 2013.
The refinancing follows the conversion of Lone Star’s debt to direct ownership of the Dublin office property portfolio, valued at around €530m. Based on which valuation, Lone Star’s sought €400m in fresh debt reflects a 75% LTV if the full amount of finance is raised.
Eastdil Secured is understood to be already in discussions with prospective investment banks and insurance lenders.
If an investment bank is appointed, the likelihood is that the whole loan would be split into A/B tranches, with the senior loan either securitised or syndicated.
In the event of a syndication exit strategy by an appointed investment bank, participators in the fresh senior facility are expected to include Irish domestic banks.
For Lone Star, the new facility would also be a partial cash-out refinancing for the stabilised Dublin office portfolio, for which values have risen considerably since the private equity firm’s various loan acquisitions.
The new facility would partially refinance a €210m Royal Bank of Canada (RBC) Capital Markets loan-on-loan facility, which currently secures Project Holly and the 75 St. Stephens Green. The price of the RBC facility is circa 400 basis points
Major assets in Project Holly include:
- the 210,000 sq ft Iveagh Court Complex, the five-block business and residential complex at the junction of Harcourt Road and Charlemont Street with current tenants including Mercer, Central Bank of Ireland, Hewitt, Office of Public Works, Skandia Global Funds as well as the Ireland embassy offices of Denmark and Estonia;
- the Watermarque Building, Bridge Street & South Lotts Road, Dublin 4;
- CityNorth, a 100-acre mixed-use commercial development, comprised of office blocks and a hotel, CityNorth Hotel, the four-star 128-bed hotel in Gormanston, Dublin.
- Marsh House, 25/28 Adelaide Road, Dublin 2, which is the Irish headquarters for March, the global insurance broking and risk management firm.
- 11-12 Hogan Place, Dublin 2, a four-storey office block close to Merrion Square and south Docklands.
Lone Star acquired the RBS loan secured by 75 St Stephen’s Green back in December 2013 for €79m reflecting a net initial yield of 7.49%, fending of competition from PIMCO and Madison International.