FINANCE: Morgan Stanley has been selected to refinance Green Property’s Blanchardstown town centre near Dublin with a €750m (£543m) loan.
The deal with the US bank reflects the desire of lenders to return to the Irish market by writing large cheques at loan-to-values so far unseen this cycle.
Green appointed Eastdil Secured in February to search for the debt, which reflects an 83% LTV. The 1.5m sq ft complex comprises a 600,000 sq ft shopping centre, 400,000 sq ft of retail warehouse, a Crowne Plaza hotel, offices and leisure facilities.
Morgan Stanley has written a whole loan, of which it is expected to syndicate or securitise the majority. Rival banks looking at the deal, which include Deutsche Bank, Bank of America Merrill Lynch and Citi, are thought to have priced a €587m senior portion of the loan at a margin of just over 200 bps and a €163m mezzanine tranche with a detachment point of 65% at an internal rate of return of 8%.
The existing debt, due to expire this month, is held by a large syndicate made up of traditional lending banks as well as private equity firms that have obtained their interest through post-downturn loan sales.
The deal is a success for the private equity firms such as Blackstone, Lone Star and Marathon Asset Management, which will be paid back at par, and for other lenders in the syndicate such as Ulster Bank that are looking to decrease their real estate exposure.
For others such as Helaba, Bank of Ireland and Allied Irish Bank that are looking to actively lend in the market, it will diminish the size of their loan books.
Blanchardstown was completed by Green in 1996 and is the largest asset managed by the company, which is headed by chairman Stephen Vernon and chief executive Pat Gunne. It is owned by its Green Property Investment Fund 1 and is separate to Green REIT, the Dublin-listed vehicle launched by Green’s management in July 2013.
