Kennedy Wilson Buys $1.6B Initial Tranche Of Loan Portfolio From Pacific Western Bank

Kennedy-Wilson Holdings Inc KW disclosed the acquisition of the first tranche of a loan portfolio from Pacific Western Bank for $1.6 billion.

The deal is part of the previously announced acquisition of a $5.7 billion loan portfolio from Pacific Western Bank, a subsidiary of PacWest Bancorp PACW.

The off-market transaction will add over $2 billion to fee-bearing capital and boost KW's debt investment platform.

The acquired portfolio comprises loans based in KW's key Western U.S. markets and expands its footprint across the Southern and Eastern U.S.

The first tranche of loans includes $3.25 billion in total commitments and $1.8 billion in current principal balance.  

Apart from this, an additional 12 loans totalling $800 million in commitments is expected to close on a rolling basis by the end of July.

The $5.7 billion in loans arranged by Kennedy Wilson comprise $4.1 billion worth Loan Portfolio, $1.2 billion of loan commitments to be bought by a third party ($970 million already acquired), and loans of $400 million, subject to further due diligence.

As an asset manager, Kennedy Wilson will earn customary fees and own 5% of the loan portfolio. 

"The acquisition of this Loan Portfolio from Pacific Western Bank highlights Kennedy Wilson's historic ability to find off-market transactions during periods of uncertainty, move with speed, and build on our successful track record of investing through all real estate cycles. The foundations of Kennedy Wilson are our deep relationships, our reputation as a great partner, and our strength in being nimble when opportunity arises; all of which came into play with this loan portfolio acquisition," said William McMorrow, Chairman and CEO.

Price Action: KW shares closed higher by 0.82% at $17.13 on Thursday.