Last Week's Incredible Loans: rPlus $1 Billion, Leeward $1.25 Billion, Post Road $12 Million

Good Morning Everyone

This week in Deals:

$4.28 billion in top 10 CRE deals
$3.67 billion in top 10 Growth Cap deals
$37.9 million in top 7 ABL deals
$2.69 billion in top 10 International deals

Top CRE Lenders
Crédit Agricole, KeyBanc, MUFG, Truist Securities, Wells Fargo, Cale Street Partners, Farallon Capital Management, U.S. Dept. of Energy, HPS, Deutsche Bank, Morgan Stanley, Barings, Banco Inbursa, Citi Real Estate Funding, PCCP, ACORE Capital, and 3650 REIT

Top Growth Cap Lenders
Wells Fargo, CIBC, RBC, TD Bank, Banco Bilbao, Vizcaya Argentaria, BNP Paribas, Fédération des Caisses, Desjardins du Quebec, Intesa Sanpaolo, National Bank of Canada, Natixis, SMBC, Standard Chartered Bank, MUFG, Truist, First Horizon Bank, JP Morgan, Y Combinator, Saga, Silver Point Finance, Stonepeak Credit, Hercules Capital, and Huntington Business Credit

Top ABL Lenders
Post Road Equipment Finance, SLR Healthcare ABL, Clarus Capital, Utica Equipment Finance, Republic Business Credit, Gateway, and nFusion Capital

Top International Lenders
SEB, BNP Paribas, Citibank, DNB Bank ASA, JP Morgan, Nordea Bank, Swedbank, RBC Capital Markets, CBA, Westpac, BNP Paribas, CIBC, Siemens Financial Services, European Investment Bank, ABN Amro, ING, Zencap Asset Management, SWEN Capital Partners, Homes England, HSBC, OakNorth, Clean Energy Finance Corporation, and FERED

Top Global Loans Video: https://youtube.com/shorts/xo1WKOJkQQM

🌆Top Weekly CRE Deals

• Utah developer rPlus secures $1B in financing for 400 MW/1600 MWh solar-plus-storage project Read

• Manhattan Residential Towers Project secures $985M loan Read

• DOE announces $861M loan for utility-scale solar and storage installations in Puerto Rico Read

• Intersect Power to build $837M worth of grid batteries in Texas Read

• Barings provides $244M refi for 6.4M-SF industrial park outside Kansas City Read

• Greystar gets $111M construction loan to start Boston-area apartments Read

• Citi Real Estate Funding provides $85M refi for Ashkenazy’s UWS hotel Read

• PCCP lends $61M construction loan on 420K-SF N.J. industrial property Read

• DH Property Holdings gets $54M construction loan for Philly industrial project Read

• Prime Finance lends $54M on NYC rent-regulated multifamily portfolio purchase Read

Summary

Here’s what we are seeing in the latest loans:

• Atlas Capital Group secured a $985 million five-year construction loan for a Manhattan residential complex from Cale Street Partners and Farallon Capital Management

• Citi Real Estate Funding provided an $85 million five-year loan for Ashkenazy Acquisition Corporation's Arthouse Hotel in New York City

• Mesa West Capital provided a $47 million floating-rate loan (up to 5 years) for a senior living community in Richmond, VA

• Prime Finance supplied a $43.8 million floating-rate bridge financing with a five-year term and extensions for the Courtyard by Marriott San Jose Campbell

• Peachtree Group originated a $10.7 million CPACE financing with a 30-year term for a Nashville office development
  
  

Loan Structures
The recent spate of mega-loans in commercial real estate and energy sectors reveals a notable shift in lending structures. While specific LTVs remain undisclosed, the sheer magnitude of these loans suggests lenders are comfortable with higher ratios, particularly for renewable energy projects. Tenors appear extended, especially for energy deals, reflecting the long-term nature of these assets. Construction loans dominate the top deals, indicating a preference for floating rate structures, likely coupled with rate caps to mitigate volatility risk. This approach allows borrowers to potentially benefit from rate decreases while providing a safety net against sharp increases. The involvement of multiple lenders in these transactions points to a trend of risk-sharing.

Tips For Borrowers

1. Focus on assets in prime locations with strong market fundamentals.

2. Be prepared for shorter loan terms and potentially higher interest rates.

3. Demonstrate a clear value-add strategy or strong tenancy to attract lender interest.

4. Leverage relationships with experienced brokers to access a wider pool of potential lenders.

5. Be ready to provide substantial equity contributions to secure more favorable loan terms.

💡Top Markets/Opportunities:

CRE Lenders Focus:
1) Renewable energy projects, especially those combining solar and battery storage
2) Partnering with other lenders to fund large-scale mixed-use developments
3) Opportunities in Puerto Rico's energy infrastructure
4) Hotel renovations or acquisitions in major cities

CRE Developers Focus:
1) Large-scale, mixed-use projects that incorporate both luxury and affordable housing
2) Renewable energy infrastructure construction
3) Industrial properties near major transportation hubs

CRE Investors Focus:
1) Companies that specialize in renewable energy development
2) REITs that focus on mixed-use urban developments
3) Investment opportunities in Puerto Rico's infrastructure

CRE Brokers Focus:
1) Building relationships with renewable energy developers
2) Arranging financing for mixed-use urban developments
3) Developing expertise in government-backed energy project financing

💸Top Weekly Growth Capital Deals

• Leeward Renewable Energy secures $1.25B in warehouse facility financing to accelerate construction of renewable energy projects Read

• Tillman Fiber secures $1B in financing for Florida rollout Read

• Clifford Chance advises on $250M financing for expansion of fiber network Read

• Health Catalyst announces new credit facility for up to $225M Read

• Stonebriar closes $200M lease for global data center Read

• 8x8, Inc. secures $200M term loan at reduced interest rate Read

• Slope raises $175M debt funding from J.P. Morgan & others Read

• Omni Fiber announces $150M in financing from Stonepeak Credit to continue rapid expansion in the Midwest Read

• Deepfake-detecting firm Pindrop lands $100M loan to grow its offerings Read

• Huntington Business Credit closes $99M in new credit facilities with Lumbermen’s Read

Top Weekly ABL Deals

• Post Road Equipment Finance closes two transactions with $27M in the automotive industry Read

• SLR Healthcare ABL provides $7.5M financing to a chronic care physician services company Read

• Clarus Capital closes $6M loan financing for sponsor-backed business services provider Read

• Utica Equipment Finance completes $4.9M capital lease for electric vehicle manufacturer Read

• Republic Business Credit provides a $3M factoring facility to fuel the rapid growth of LA-based apparel manufacturer Read

• Gateway Trade Funding provides $2.5M in stretch financing to a home décor company Read

• $2M working capital from nFusion fuels Lone Star Pipe Services launch and project pipeline Read

Summary
Here’s what we are seeing in the latest loans:

• Leeward Renewable Energy closed a $1.25 billion three-year construction warehouse facility, with an option to extend for an additional year

• 8x8, Inc. entered into a five-year term loan facility for up to $225 million, comprising an initial $125 million term loan and a $100 million delayed draw component, with interest rates ranging from SOFR plus 2.50% to 3.00% based on the company's leverage ratio

• Global Self Storage extended its $15 million revolving credit facility for three years, with interest set at one-month SOFR plus 3.00%

• Enthusiast Gaming Holdings secured a $20 million four-year term loan bearing a fixed interest rate of 14% per annum.

Loan Structures
The prevalence of five-year terms, as seen in Health Catalyst's $225 million facility and 8x8's $200 million deal, suggests a sweet spot balancing long-term stability with flexibility. Floating-rate structures often pegged to SOFR, are becoming the norm, reflecting lenders' desire to hedge against inflation risks. The inclusion of delayed draw options, exemplified by 8x8's facility, suggests lenders are accommodating uncertain capital needs and potentially mitigating their own risk by staggering commitments. The higher fixed rate of 14% in Enthusiast Gaming's loan, coupled with an in-kind interest option, points to a risk premium for the gaming sector but also acknowledges potential cash flow constraints in growth phases. Covenants are tightening, with lenders favoring financial maintenance tests over incurrence-based covenants.

Tips For Borrowers

1. Consider delayed draw structures to align capital availability with growth needs, as seen in 8x8's deal

2. Explore in-kind interest options for early-stage growth periods, similar to Enthusiast Gaming's arrangement

3. Pursue multi-currency facilities to support international operations, as exemplified by d.light's $176 million securitization for African markets

4. Maintain a strong balance sheet and clear growth strategy to attract favorable terms, as evidenced by Global Self Storage's competitive rate

5. To secure more attractive financing terms, be prepared to offer tangible assets as collateral, particularly in asset-intensive industries

💡Top Markets/Opportunities:
Asset-Based/Growth Cap Lenders Focus
1) Renewable energy projects
2) Fiber infrastructure companies
3) B2B fintech platforms
4) Healthcare technology firms

Family Offices Focus
1) Investing in companies developing AI for industrial applications
2) Sustainable building materials suppliers
3) Companies specializing in energy storage solutions

Private Equity Firms Focus
1) Target regional fiber internet providers for consolidation
2) Tech-enabled business services providers
3) Chronic care physician services platforms

Brokers Focus
1) Connect equipment finance needs for electric vehicle manufacturers
2) Facilitate working capital solutions for seasonal businesses
3) Explore financing options for apparel manufacturers

Top International Deals

• Embracer Group secures new €600M revolving credit facility Read

• Akaysha Energy secures A$650M financing for Orana BESS in NSW Read

• Stora Enso secures €435M loan to support growth in Finnish fiber-based boards Read

• Russel Metals renews and enhances its $450M credit facility to $600M Read

• TEN fixes $245M tanker financing Read

• d.light closes US$176M new financing for off-grid offerings in Africa Read

• Tilia Homes secures £125M government loan Read

• Sustainable Fuel Plant Group lands $131M green loan for 40MW of biomethane capacity Read

• Veld Capital and Maya Capital complete £45.7M loan from OakNorth to fund development of new central London property Read

• Intellihub receives AU$50M loan for smart meter tech in Australia Read
  

Summary
Here’s what we are seeing in the latest loans:

• Embracer Group secured a €600 million revolving credit facility with a two-year tenor and an option to extend for an additional year, replacing a maturing facility

• Russel Metals renewed and extended its credit facility, including a $400 million revolving credit facility with a maturity of July 2028 and a $150 million revolving credit facility with a maturity of July 2026

• Stora Enso signed a €435 million bilateral loan featuring an amortizing structure. The final repayment is anticipated in 2036.

• Akaysha Energy closed an A$650m three-year facility for the Orana battery energy storage system project.
  

Loan Structures
Last week, there was a trend towards longer tenors with extension options, as seen in Embracer Group's two-year facility with a one-year extension and Russel Metals' facilities, which extended up to five years. This suggests lenders are comfortable with longer commitments but are building in optionality to reassess terms. Interest rates likely incorporate ESG-linked pricing and credit rating step-ups, hinting at a more holistic approach to risk pricing. Covenant packages are evolving, with Russel Metals' deal highlighting a move towards more flexible, investment-grade style covenants that likely focus on leverage and interest coverage ratios rather than strict operational metrics. This evolution in covenant structures suggests a maturing approach to risk assessment, where lenders emphasize overall financial health and strategic direction rather than granular operational controls.

Tips For Borrowers

1. Consider negotiating extension options in credit facilities to provide additional flexibility in uncertain economic times.

2. Explore opportunities to transition to investment-grade type covenants if your company's financial profile has significantly improved.

3. Leverage sustainability-linked loan structures, as seen in Tilia Homes' £125 million loan, to potentially secure better terms while aligning with ESG goals.

4. Proactively communicate improvements in your company's financial structure and performance to potentially secure more favorable terms, as exemplified by Russel Metals' refinancing.

New Lender Program

• Calvert Impact announces national program to capitalize small businesses Read

😲Didn’t see that one coming

• Minskoff defaults on $250M loan backing 500K-SF office on L.A.’s Westside Read

• US regulators fine Citigroup $136M for “insufficient progress” towards compliance with 2020 consent order Read

• Extell facing foreclosure on The Belnord’s retail condos Read

• One Table Restaurant Brands files for Chapter 11 bankruptcy protections Read

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