Tim Knowles, the property investor and borrower behind the Lea Valley securitised loan, has been successful in acquiring the distressed 24-strong portfolio through his First Investments Limited firm in an £88m discounted purchase offer (DPO) through Solutus Advisors, the special servicing firm he indirectly founded.
Knowles’ £88m DPO – after £2m in costs associated with executing the transaction –reflects a 58.2% discount on the £210.7m unpaid balance of the Lea Valley loan, which forms part of the DECO 8 £ UK Conduit 2 p.l.c CMBS.
This was first reported by CoStar News four weeks ago.
There were no additional underbidders for the Lea Valley loan. Knowles has selected two lenders to finance the acquisition but declined to reveal the mix and quantum of debt at this stage.
In addition, the £88m purchase price also reflects a 1.5% discount on the latest valuation of portfolio of £89.4m, as reported by Situs in the January quarterly investor report.
The proceeds of the DPO will be used to pay certain fees and expenses and then repay the principal of the Lea Valley Loan to DECO 8. Recovery estimates for noteholders in the DECO 8 CMBS vary – and are subject to the future recoveries in the conduit CMBS remaining eight loans.
The three largest are the Lea Valley loan; the Mapeley II loan; and Vincent Tchenguiz’s Fairhold Portfolio loan.
In mid-April, a Solutus Advisors-commissioned Cushman