Lone Star has completed its purchase of the £900m Project Royal loan book from Lloyds Banking Group.
The US private equity firm bought the book of performing and non-performing loans from an affiliate of Lone Star Real Estate Fund II, beating competition from rivals Colony Capital and Cerberus.
Citigroup and Royal Bank of Canada will provide senior financing for the deal to buy the portfolio of more than 30 loans, which has a face value of more than £900m.
Lloyds will not provide any vendor finance, and has completed a full “risk-transfer” of the loans as part of the deal.
Hudson Advisors’ affiliate in London will provide the loan servicing and asset management for the portfolio. Hudson Advisors and its affiliates have extensive relevant experience of maximising the value of distressed real estate loan portfolios in many international markets.
Angus Dodd, managing director, UK Real Estate, at Lone Star Management Europe, advisor to the Lone Star Funds, said: “We are very pleased to have completed the acquisition in a timely manner, and thank Lloyds for its support throughout the process. We are confident of the ability of the Lone Star Funds to deliver constructive solutions to banks and, as further deleveraging takes place in the property sector, the Lone Star funds are well placed to invest in further opportunities as and when they arise.”
Richard Dakin, LLoyds managing director and head of corporate real estate, said: “We have continued 2010’s momentum in deleveraging our Corporate Real Estate loan book throughout 2011, despite what has been a significantly more challenging environment for property transactions.”
bridget.oconnell@estatesgazette.com
