Starwood European Real Estate Finance Ltd (SWEF) SWEF: Portfolio
Update 18-Nov-2021 / 07:00 GMT/BST Dissemination of a Regulatory
Announcement that contains inside information according to
REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. The
issuer is solely responsible for the content of this
announcement.
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18 November 2021
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN
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JURISDICTION
Starwood European Real Estate Finance Limited
Investment and Portfolio Update
GBP76 million UK hotel loan with related party private debt
fund
Starwood European Real Estate Finance Limited and its
subsidiaries ("SEREF" or "the Group"), a leading investor
originating, executing and managing a diverse portfolio of
high-quality real estate debt in the UK and Europe, is pleased to
announce that during November 2021 it closed a GBP76 million
floating rate, acquisition and capital expenditure whole loan
secured on a portfolio of two UK based hotel assets. This loan was
closed in conjunction with Starwood European Real Debt Finance I
and its subsidiaries, a newly launched, Guernsey domiciled, private
debt fund acting as co lender.
SEREF has taken on two thirds of the GBP76 million commitment,
with the private debt fund taking the other third. The loan term is
five years and the Group expects to earn an attractive
risk-adjusted return in line with its stated investment
strategy.
The portfolio consists of two hotels in attractive city centre
locations in Manchester and Edinburgh. The hotels will be
rebranded, targeting domestic and international visitors in two of
Europe's best performing markets in 2021.
Following the initial drawdown of this loan, SEREF will be fully
invested and has a net debt position of GBP4.3m as at 15 November
2021. The Group's pipeline of prospective new investments is
robust, with a strong likelihood of further investments in the
medium term.
The loan benefits from a floating interest rate. This provides
for an inflation hedge as the loan will generate a greater return
in a higher interest rate market that is likely to result from
increased inflation. Following this investment circa 78 per cent of
the portfolio benefits from floating interest rates.
Stephen Smith, Non-executive Chairman, said:
"The UK hospitality leisure market is performing well, with high
levels of domestic demand post-Covid. We are therefore delighted to
have entered into this highly attractive new loan. The assets
themselves are very well located to capitalise on the strength of
the market, and as such will enhance our portfolio and shareholder
value"
Portfolio update: transition from LIBOR to Sonia
Some interest rate benchmarks that have historically been used
for setting real estate loan interest including Sterling LIBOR are
being phased out over the coming years. The Company is well
prepared for LIBOR to SONIA transition and implementation of the
transition plan well progressed.
Borrowing activities where the Group pays floating rate
interest
-- The Group can borrow in Sterling and Euro under two revolving
credit facilities being an unsecuredcorporate RCF of GBP50 million
and a secured RCF of GBP76 million.
-- All borrowings are floating rate.
-- Euro borrowings use Euribor as the reference rate and will
continue to do so as Euribor is not beingretired.
-- For Sterling borrowings on the unsecured corporate RCF,
conversion to a SONIA based reference rate tookeffect on September
30th 2021.
-- For Sterling borrowings on the secured RCF, the reference
rate matches the underlying collateral that isbeing borrowed
against, i.e. as our loan investments are amended to migrate to
SONIA the corresponding borrowingson the secured RCF also
automatically migrate.
Loan investments where the Group received floating rate
income
-- The Group is actively engaging with existing borrowers on
LIBOR referenced loans in order to transitionthem to SONIA in line
with wider market practice given the forthcoming cessation of
LIBOR.
-- Engagement started earlier this year and we are targeting to
have all remaining LIBOR loans legallytransitioned in advance of
year end 2021 or latest by the first interest payment date falling
in Q1 2022.
-- The relevant loan facility agreements are being amended in
line with standard Loan Market AssociationSONIA conversion
provisions which provides for loan interest to be calculated by
reference to SONIA on a 'lookbackwithout observation shift'
basis.
For further information, please contact:
Apex Fund and Corporate Services (Guernsey) Limited as Company
Secretary
+44 (0) 20 3530 3661
Magdala Mullegadoo
Starwood Capital +44 (0) 20 7016 3655
Duncan MacPherson
Jefferies International Limited +44 (0) 20 7029 8000
Stuart Klein
Neil Winward
Gaudi Le Roux
Buchanan +44 (0) 20 7466 5000
Helen Tarbet +44 (0) 07788 528143
Henry Wilson
Hannah Ratcliff
Notes to Editors:
Starwood European Real Estate Finance Limited is an investment
company listed on the main market of the London Stock Exchange with
an investment objective to provide Shareholders with regular
dividends and an attractive total return while limiting downside
risk, through the origination, execution, acquisition and servicing
of a diversified portfolio of real estate debt investments in the
UK and the wider European Union's internal market.
www.starwoodeuropeanfinance.com.
The Group is the largest London-listed vehicle to provide
investors with pure play exposure to real estate lending.
The Group's assets are managed by Starwood European Finance
Partners Limited, an indirect wholly owned subsidiary of the
Starwood Capital Group.
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ISIN: GG00B79WC100
Category Code: PFU
TIDM: SWEF
LEI Code: 5493004YMVUQ9Z7JGZ50
Sequence No.: 127092
EQS News ID: 1249846
End of Announcement EQS News Service
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