Nordlys AB

We were appointed by Nordlys to assist with the refinancing of the group’s two assets 1) a SEK 635m (€70m) portfolio of office properties in Karlskrona with very stable tenants on relatively short leases and 2) a €42m Spa Hotel in Turku, Finland. The existing lenders had both decided that the Nordic region was no longer part of their core strategy and had indicated an unwillingness to offer rollover terms.

The first challenge was the LTV in the Swedish portfolio as it was >80%, which combined with the short WALE made it a challenging proposition as a stand alone asset for traditional bank finance.

The Turku hotel had a very strong tenant with 6 years left on the lease and an LTV just over 50%, but was disadvantaged by it’s, virtually, unknown location, a loan size wasn’t big and its sector, hotels are generally more difficult to finance than other property assets.

Our solution was to combine the two assets and utilise the extra equity in the hotel to lower the overall LTV to 73% and then fund the entire debt through a bond issue in the Swedish market, distributed by ABGSC.

Completion was complicated by transfer of one of the two loans during WCL’s engagement. We began negotiations with Lloyds who was the original lender to the Swedish portfolio, who then went ‘quiet’ while they put up a portfolio of european loans for sale. After the sale completed we were able to engage with Cerberus who had acquired the loan from Lloyds through the Project Hampton ‘Charlie’ portfolio.

Ultimately we were successful in delivering the finance our client required on commercially acceptable terms.