The Chinese Investment Corporation (CIC) is partnering with private equity firm Blackstone to purchase an interest in the £1.4 bn (EUR 1.6 bn) property loan portfolio being sold by the Royal Bank of Scotland.
The Chinese Investment Corporation (CIC) is partnering with private equity firm Blackstone to purchase an interest in the £1.4 bn (EUR 1.6 bn) property loan portfolio being sold by the Royal Bank of Scotland.
China's $409 bn sovereign wealth fund has agreed a deal to purchase a 12.5% stake in the equity of the loan portfolio, according to a news report in PropertyWeek. CIC, which also owns a 10% stake in Blackstone, is believed to be making an investment of about £50 mln.
Blackstone will buy a minority position but will assume the management of the portfolio, which includes 35 performing and non performing loans with a high loan-to-value ratio of more than 90%.
The loans, with a face value of £1.4 bn, are believed to be sold for a 30% discount, or a price of around £1bn. The deal - nicknamed Project Isobel - involves roughly 60% of debt provided by RBS and other lenders. Blackstone will take a 25% stake, amounting to around £100 mln, and CIC will take half this stake. Other investors will participate and make up for the remaining £250 mln of needed equity.
