Aviva makes third £100m-plus loan this year
Aviva Commercial Finance has provided £104m of senior debt for the construction and operation of two new headquarters for West Yorkshire Police Authority.
The 24-year term loan was made by the insurer’s Public Private Finance team and is the third large loan made by the commercial lending business this year.
Last month Aviva provided £100m of senior debt at a competitive rate of 4.9% to self-storage company Big Yellow and in March, £145m to the Kirsh Group to buy Tower 42 in the City of London.
The fixed-price loan for the police project was priced at a margin over the 2028 gilt at 2.43%, so is likely to be at a cost to the sponsor of around or just over 5%. The loan will fully amortise over the term according to life-cycle cashflows of the operation of the business.
The borrower is, led by infrastructure investor and developers Interserve and Equitix. The buildings, in Leeds and Normanton, will start coming into use from December 2013.
Aviva, and other insurers active in the UK senior lending market such as M&G, MetLife and latterly Legal & General have been targeting large loans and have been the main source of such finance for borrowers so far this year.
Kevin Sale, commercial finance director at Aviva, said: “We are really pleased to have been able to extend our lending to the police sector on this project. Aviva Commercial Finance provides long-term, fixed rate debt across a number of sectors and this scheme represents a good long-term investment for Aviva and our customers”.
Jane Roberts, editor
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