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Capital Markets

LBOs: Vital ingredient for Inmocaral

Arrangers have confirmed that CMBS will form part of the permanent financing for Grupo Inmocaral’s €3.7 billion bid for Inmobiliara Colonial. The target has assets in Spain and France, owning a majority stake in French SIIC Société Foncière Lyonnaise.

Goldman Sachs and RBS have arranged financing for the bid. The banks took the unusual approach of providing a structured acquisition loan rather than a bridge financing. “The way we thought about it was let’s figure out what the endgame is and what the permanent financing will look like,” explains Zubin Irani, managing director at Goldman. “We set up a series of loans based on what the requirements were and where the loans would end up. This was instead of providing a bridge loan where you might need to take refinancing risk six or nine months down the road.”

The financing has been put in place on a temporary basis and will be refinanced when the merger takes place and Inmocaral takes control of Colonial. “We are going to hold a significant portion of this within our funds,” explains Irani. “We will be using the funds that we have together with CMBS and syndication capabilities on it.

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