One of the world’s biggest life insurers, MassMutual Financial Group, has made its first move into UK property lending with an £83 million, 12-year loan to property firm Derwent London through subsidiary Cornerstone.
The deal comes as UK banks look to reduce their exposure to property built up before the credit crunch. It cuts Derwent’s share of borrowing from banks to around 50%.
The new loan provides long-term fixed rate debt at a rate of 3.99% to July 2024.
This completes the refinancing of £575m of Derwent London group facilities that were due to expire in 2013.
The new loan was fully drawn on 1 August 2012 and has been used to replace the remaining part of a syndicated loan facility which was reduced to £150m in January 2012 and of which £95m was drawn.
The loan is secured on two office buildings in the west end. The 147,900 sq ft office building at 8 Fitzroy Street which is fully leased to engineering and design group, Arup and 120-134 Tottenham Court Road.
Cornerstone is a member of the Mass Mutual Financial Group and this deal is their first real estate lending agreement in the UK.
