ING Real Estate Finance has completed the syndication of the £365m senior loan secured by London’s iconic Gherkin skyscraper at 30 St. Mary’s Axe in the City.
The seven-year senior loan was priced at 120 basis points over three-month LIBOR, reflecting a new benchmark for UK senior credit spreads post-crisis. The £365m loan financed Safra Group’s acquisition of the Gherkin in December for a total consideration of £726m.
However, this total includes swap liabilities. Safra Group’s ING financing reflects a 52% LTV, which implies a purchase price for the skyscraper of circa £702m.
ING sold £120m of the senior loan to LBBW, which was also appointed mandated lead arranger. LBBW and ING were both previous lenders in the legacy financing for IVG and Evans Randall, which was mired in complexity attributed to an unhedged Swiss Franc loan tranche.
In addition, Sumitomo Mitsui Trust Bank has taken £60m, Shinsei for £50m, while SMBC and a German bank have both taken a sub £50m piece. ING has retained around 20% of the deal, or around £73m.
The full 120 bps margin was passed on to banks participating in the syndication.
The seven-year senior loan matures in 2021. ING is entering a growth phase for its European senior lending business, primarily focusing on Germany, France, Benelux, Poland and the UK.
In addition, ING is expecting to enter the Irish lending market this year and is among a number of banks looking at financing Starwood Property Trust’s €350m Dublin office portfolio acquisition from Lone Star.
Evans Randall, the boutique investment bank, and Germany’s IVG Immobilien, through its Euroselect 14 fund, jointly acquired 30 St Mary Axe for £630m in February 2007 from Swiss Re, the re-insurance giant, which remains the property’s largest tenant.
The joint venture partners financed the acquisition with a 15-year £396m senior loan among a syndicate of senior lenders comprised of Bayerischen Landesbank (BayernLB), Helaba, Deka Bank, ING Real Estate Finance and LBBW.
CoStar News also understands that there was a sub £50m junior loan held by BayernLB.
Last April, when the creditors called in the receivers, CoStar News wrote in an analysis piece at the time: “In the circular nature of markets, through an eventual sale of the Gherkin, whether to a sovereign wealth fund or any of a host of core-type investors, the asset would be ironically an incredibly attractive financing mandate, possibly even including some of the very lenders which have agreed to call in the receivers yesterday.”
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All parties declined to comment.