HORSHAM, PA - For Capmark Financial Group Inc. today, there was light at the end of the tunnel. The Horsham, PA-based international commercial real estate lender and mortgage banker will be getting a $1.5 billion loan from an undisclosed banking consortium. The deal is expected to close May 21.
According to some industry sources, the financing is the largest loan of its kind made by private banks since President Barack Obama's May 1 announcement. At that time, Obama urged lenders again to loosen the purse strings for commercial real estate players as well as for borrowers in the residential arena.
Today's financing announcement also marks a new level of cooperation by lenders in agreeing to extend existing large loans coming due shortly at commercial real estate houses, industry sources point out.
The two-year term loan will mature March 23, 2011. However, if certain conditions on the restructuring of Capmark's senior notes due 2010 have not been met, the maturity date will be accelerated to April 2010, according to Capmark's prepared statement.
Capmark is putting up its US and Canadian non-bank mortgage loan assets as collateral for the loan.
Capmark plans to use the loan, along with $750 million in cash, to refinance a portion of its bridge loan contract and senior credit facility that it has with other lenders. Those lenders have now extended the maturity date of about 94 percent of the company's bridge loan contract to May 21 of this year. The amount of the bridge loan and its balance was not disclosed.
Commercial mortgages are Capmark Financial's core business. The company originates, services, and invests in mortgages for commercial real estate including retail, office, health care, hospitality, and multifamily properties. It also invests in real estate-related assets for institutional and high-net-worth investors.
Capmark Financial has 55 offices in North America, Europe, and Asia. The company originates more than $20 billion in commercial mortgages each year and its servicing portfolio is worth more than $300 billion. The investment business has more than $10.3 billion in assets under management.
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The company started in 1994 as GMAC Commercial Mortgage Corp. Affiliates of Kohlberg Kravis Roberts & Co. ("KKR"), Five Mile Capital Partners, LLC and Goldman Sachs Capital Partners jointly acquired Capmark on Aug. 3, 2005 for $16.8 billion. The book equity at closing on March 23, 2006 was listed as $2.1 billion.
Source: RealEstateChannel.com