Wells Fargo and Santander are to provide a £150m loan to Legal & General Property for its purchase of the Overgate shopping centre in Dundee.
The banks have agreed a facility that would allow L&G’s UK Property Income Fund II to complete the purchase of the shopping centre from Land Securities for around the £125m asking price.
The US giant is understood to be leading the deal and acting as agent for the loan, which will be provided equally by the lenders.
It is thought to be one of the first instances of Wells Fargo’s London office leading a deal with an existing client from the former Eurohypo business, which the US lender bought in the middle of last year.
Eurohypo and Santander provided funding for the precursor fund, L&G UK PIF I, which allows investors to choose their preferred level of gearing of between 0% and 50% loan to value.
UK PIF I’s £177m “hunting licence” unsecured debt facility with Wells Fargo and Santander expires in 2017.
The follow-on fund, which raised £138m at a first close in November, retains this structure, which allows the fund to achieve a net internal rate of return of 8-9% for ungeared investors and a net IRR of 12-14% for geared investors.
Last month, Wells Fargo participated in a consortium that included HSBC, BNP Paribas, Royal Bank of Scotland, Crédit Agricole and Santander to provide a new £665m unsecured revolving credit facility for Capital & Counties.
Wells Fargo took about £50m in the refinancing of the Covent Garden Estate.
It has also provided loan-on-loan finance for Lone Star’s acquisition of both Eurohypo’s impaired loans and as part of a club that is funding the private equity firm’s purchase of €5.2bn of loans from IBRC. It took an equal share of the £2bn loan alongside Royal Bank of Canada and Citi.
All parties declined to comment.
