Pramerica is lining up a second loan from its £150m mezzanine debt fund as its first deal is completed.
The fund is understood to be providing around £50m of mezzanine debt for Beacon Capital Partner’s refinancing of Midtown landmark MidCity Place, WC1.
The debt equates to around 20% of the new loan. Lending terms are under negotiation.
German lender Deka bank is understood to be providing around £165m of senior debt.
The US opportunity fund bought the 350,000 sq ft office in 2007 for around £325m. It inherited vendor Delancey’s and Invista Real Estate’s £215m debt package on the building with the purchase.
The interest-only loan, which was securitised as part of the Lehman Brothers Windermere VIII vehicle, is set to mature in April next year.
Pramerica’s mezzanine fund, run by veteran property bankers Andrew Radkiewicz and Andrew Macland, has this week finalised its debut deal.
It provided £36.4m of mezzanine debt for Evans Randall’s £242.5m purchase of Drapers Gardens, EC2, which was completed on Wednesday.
The private bank bought the building from a joint venture including Canary Wharf Group and a subsidiary of Morgan Stanley Real Estate Funds.
It has tapped investors for £49m of equity that it needed for the deal.
Pramerica lent the money with an interest rate of 13.5%. Evans Randall pays Pramerica only 5% interest a year, where most mezzanine funds would want an 8-10% coupon.
The remainder will accrue upon exit or refinancing.
Eurohypo provided £169.8m of senior debt, or 70% of the purchase price, at 195 basis points over Libor.
The German bank intends to keep half of that on its books. One-quarter is expected to go to DG HYP, while Eurohypo is still looking for a home for the other quarter.
The debt was arranged by Michael Acratopulo, Eurohypo’s head of UK origination.
It has also provided around £25m debt for Moorfield’s and Resonance Capital’s £52m purchase of SkyPark in Glasgow from Kenmore Property Group and Paradigm Real Estate Managers, which was completed this week.
