Cerberus Capital Management has turned to Japanese lender Nomura to finance its purchase of the €6.3bn (£4.7bn) Project Arrow non-performing loan portfolio from Nama.
The bank is providing close to €550m, equating to around 65% of the €850m purchase price.
Cerberus paid a discount in the region of 85% for the heavily distressed portfolio.
By face value, Project Arrow was one of the largest NPL sales this cycle and Nomura is one of only a handful of players active in the loan-on-loan sector, which is complex but yields higher margins than traditional real estate financing.
Nomura, which does not have a dedicated commercial real estate lending platform in Europe, is understood to have originated the deal out of its securitisation team, which ordinarily specialises in residential mortgage securities.
Project Arrow, however, contains a significant number of residential loans on assets in Ireland, and Nomura was well placed to underwrite the deal using its experience in the sector.
Nomura’s deal will see Cerberus pay a margin of around 375bps over Euribor on a five-year senior loan.
This cost in the current environment reflects the granular nature of the loan portfolio, which contains more than 1,500 individual loans, only a minority of which are secured on commercial assets.
Cerberus has turned to Nomura before to finance loan portfolio purchases.
In summer 2013, the bank provided about £190m for Cerberus’s purchase of the Project Thames portfolio bought from Lloyds Banking Group.
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