KB Financial units invest $103 mn in Spain hotel portfolio-backed debt

  • 2018-11-05

KB Asset Management Co. Ltd. and other units of South Korea’s top banking group KB Financial Group co-invested 90 million euros ($103 million) in a senior debt against a portfolio of 16 hotels across Spain in October.

The debt is part of 512 million euros raised by a US-based investment company in senior debts against the hotels, according to investment banking sources. The unidentified investment company owns the portfolio.

The two-year loan can be extended by another three years and expected to provide an annual average rate of around 4% to KB Asset and its affiliate companies.

KB Asset launched a domestic vehicle to invest 70 million euros in the debt, to which KB Insurance Co. Ltd. and other unidentified affiliates committed capital.

Separately, the London branch of Kookmin Bank, a key unit of KB Financial, directly invested 20 million euros in the secured debt.

The hotels consist of global chains such as Ritz-Carlton and Hilton and local European brands located in big cities and tourist destinations across Spain, including Madrid, Valencia, Canary Islands and Catalonia.

The co-investment by KB Financial’s units underscored a recent trend among South Korean financial services companies to make collective commitments to global funds so that they can become a key limited partner and source a better-yielding investment opportunity.

By Daehun Kim

daepun@hankyung.com

<Edited by Yeonhee Kim>

Photo: Getty Images Bank