by Erica Billingham
The United Bank of Kuwait is drawing up plans to sell £120m of bonds backed by commercial property loans – its third securitisation to date.
The bank has appointed adviser UBS to work on the bond issue which it hopes to launch in June. The paper will be backed by straightforward investment loans on shops, offices and industrial property throughout the UK.
UBK’s Mark Burton said that proceeds from the sale will be used to write more business, mainly investment loans. He said the bank has lent about £40m-£50m for speculative development over the past 12 months but is now pulling back from this type of funding.
Recent lending for speculative schemes includes £6.3m to Akeler for a 42,300m2 (450,500 sq ft) headquarters office development at Bath Road in Slough; £7.8m to Frendcastle Management for a mixed residential and leisure scheme at Prospect Quay, SW18; and £3.2m to Turn-stone (Cambridge) for a 3,400m2 (36,800 sq ft ) office refurbishment.
Burton said: “This time last year we thought we would do more speculative funding. But markets don’t keep on going up. I’d be surprised if we commit to the same amount in the next 12 months.”
UBK was the first bank to securitise part of its commercial property loan book when it sold £100m of asset-backed securities in 1993.
- Nursing Home Properties bought seven nursing homes for £12.6m last week – its first acquisitions since launching a £100m bond backed by a portfolio of care home leases last month. The securitisation will allow NHP to increase its portfolio by about £50m to £170m.
