Korean institutions to invest $83 mn in mezzanine debt for Apple’s office campus

  • 2017-03-13

apple_siliconvalley

Four South Korean institutional investors, including KDB Life Insurance Co. Ltd. and Allianz Life Insurance Co. Ltd., will invest $83 million in mezzanine debts secured by a Silicon Valley office complex fully leased to Apple Inc., and Korean savings funds are considering extending subordinated loans to the new owner of the property.

New York-based investment firm Tristar Capital had bought the office campus at 410-430 North Mary Avenue in Sunnyvale, California, for $290.7 million from Rockwood Capital last month.

Out of the acquisition price, Tristar is seeking to raise $232.5 million through loans arranged by French bank Natixis, according to investment banking sources on March 13.

Natixis will underwrite senior notes for the debt financing, with Korean institutional investors set to acquire mezzanine debts at an interest rate of 4.58% a year for a five-year maturity.

Along with the two life insurers, Dongbu Life Insurance Co. Ltd. and the National Federation of Fisheries Cooperatives will participate in the mezzanine financing through a real estate fund to be launched by South Korea’s Koramco Asset Management Co. Ltd. later this month.  

The 60,000-square-meter office complex consists of three buildings. It was originally built in 1989 as an office building of Boeing Co. and renovated between 2008 and 2010.

“The investment drew strong interest from insurance companies because Apple, a top IT company in the US, will remain the tenant during the investment period,” said one of sources.

The lease to Apple has seven years left, longer than the maturity of the mezzanine debts.

By Kiyeol Seo

philos@hankyung.com

<Edited by Yeonhee Kim>