06:53 AM EDT, 06/09/2023 (MT Newswires) -- Global real estate investment company Kennedy Wilson (NYSE: KW) said Friday it has closed on the initial tranche of loans as part of a US$5.7 billion ($7.6 billion) loan portfolio acquisition from Pacific Western Bank.
According to a statement, the first tranche of loans acquired by Kennedy Wilson and certain controlled affiliates of Fairfax Financial Holdings Ltd. (TSX:FFH and FFH.U), a long-time partner of Kennedy Wilson, was $3.25 billion in total commitments and $1.8 billion in current principal balance.
The first tranche of loans was acquired for $1.6 billion. An additional 12 loans totaling $800 million in commitments are expected to close on a rolling basis by no later than the end of July.
The loan portfolio is comprised of floating-rate construction loans that carry a weighted-average interest rate of about 8.6%, with about 80% of the portfolio secured by multifamily and student housing properties and the remaining including mainly industrial, hotel, and life science assets. The loan portfolio consists of loans located in Kennedy Wilson's key Western US markets and expands the company's footprint into new regions across the southern and eastern US.
The $5.7 billion in loans arranged by Kennedy Wilson includes the $4.1 billion loan portfolio, $1.2 billion of loan commitments to be bought by a third party, and $400 million of loans subject to further due diligence.
Fairfax Financial Holdings' shares lost 3% in Canada yesterday.