Both, in the middle market company financing world and real estate financing universe mezzanine capital is getting more and more attention. First, we are seeing more specialization and differentiation among the funds, which is sign of increase competition. At the same time, mezzanine funds are among biggest fundraisers in the space.
Also, in case you have missed it, our list of real estate mezzanine funds is already published and available online. So far we have received thousands of views, thus reassuring us that there was a real demand for this information.[shareaholic app=”share_buttons” id=”25491281″]
- Interesting article by Monroe Captial’s Ted Koenig on the increasing specialization of private debt funds, which in some ways replicates the developments in private equity space.
USA and Canada:
- MUNDOmedia Ltd’s CEO leads a company buyout with private equity investors. MUNDOmedia is a global performance marketing company. The Royal Bank of Canada provided senior and mezzanine financing for the transaction.
- Neuberger Berman and Northwestern Mutual provide mezzanine financing to a transaction where Vance Street Capital LLC, a Los Angeles-based private equity firm, takes stake in Motion Dynamics Corporation, a leading provider of highly engineered precision wire-based components primarily for the medical device, industrial and aerospace markets.
- F.N.B. Capital Partners, the $200 million Small Business Investment Company (SBIC) investment fund based in Pittsburgh, Pa., changes its name to Tecum Capital Partners.
- NewSpring Capital, a family of private equity funds providing growth and expansion capital, announced that NewSpring Mezzanine Capital (“NewSpring”), the Firm’s dedicated mezzanine fund, has made a $7.5 million investment in Sparus Holdings (“Sparus”) in partnership with Source Capital LLC, an existing investor in the business. The total borrowings will be used to refinance existing debt and to support the continued growth of the business. Based in Atlanta, Sparus is a holding company that manages and owns operating businesses, The Spear Group and Southern Cross. Southern Cross offers field services, field products, and software solutions, while The Spear Group specializes in project management and project controls outsourcing to utilities, pharmaceutical companies, and other large industrial customers. Sparus provides strategic direction, management oversight, and financial resources to facilitate growth for Southern Cross and The Spear Group.
- Capitala Finance Corp. (Nasdaq: CPTA) announced that it recently invested $25.0 million in total of two new investments. These include $5.0 million in the second lien debt of California Pizza Kitchen and $20.0 million in the first lien debt of AmeriMark Holdings.
- Monroe Capital LLC announced it acted as sole lead arranger and administrative agent on the funding of a $55 million unitranche credit facility to support the recapitalization of a finance technology company. The company is a full-service provider of electronic transaction processing services for merchants, offering an integrated technology platform, which delivers innovative payment solutions for credit and debit cards and Automated Clearing House (ACH) transactions to more than 8,000 merchant locations across all product lines.
- TorQuest Partners has acquired Quebec-based Polycor Inc, a nature stone producer. No financial terms were disclosed for the transaction that was done in partnership with PNC Mezzanine Capital. Also, Polycor has merged with Swenson Granite and its subsidiary Rock of Ages.
- Balance Point provided mezzanine debt to facilitate a refinancing of the existing capital structure and support the continued growth of CorePower Yoga. Founded in 2002 and headquartered in Denver, CO, CorePower is the nation’s premier yoga brand. CorePower Yoga strives to show the world the incredible, life-changing things that happen when an intensely physical workout is rooted in the mindfulness of yoga. Through a variety of yoga classes, convenient times and more than 150 studio locations, CorePower Yoga provides a highly intense and incredibly mindful form of fitness.
- Breakaway Capital Partners, a Los Angeles-based direct lending firm, announced the close of Breakaway Capital Partners Fund II, L.P., with total commitments at the hard cap of $100 million, all from family offices and individuals. The Fund was significantly oversubscribed with an initial target of $75 million.
- Acorn Growth Companies has acquired Seattle-based Raisbeck Engineering Inc, a provider of advanced aircraft technology. No financial terms were disclosed, although it is likely that Congruent Investment Partners provided financing in the transaction.
- The Baltic-Polish BPM Mezzanine Fund has invested an undisclosed amount of money in the paint producer Eskaro AS. The funding secures working capital and provides refinancing capital to Eskaro AS. Established in Tallinnm, Estonia, in 1993, Eskaro has production and commercial enterprises in six countries and is one of the leading paint producers in Estonia, Finland, Belarus, Russia and Ukraine.
- According to Sky News, UK restaurant chain Ed’s Easy Diner is on the look out for financing after the previous search for mezzanine funds has been closed without success.
- “We are working hard with our partners at NECA to ensure that the new equity, loans and mezzanine finance will be in place ready to invest in fast-growing, high potential firms from next year.” Says Andrew Hodgson, chairman of the North East LEP, which is partnering with UK’s The North East Combined Authority (NECA).
- The rapidly growing online travel company TravelBird attracted a Mezzanine loan from a Dutch firm Main Mezzanine Capital to finance its explosive growth and quality improvement.
- Pierfront Capital Mezzanine Fund Pte Ltd, an alternative credit investor in Singapore, has invested up to $58 million in mining firm PT Merdeka Copper Gold Tbk, and investment holding company Greenko Ventures Ltd in two separate deals. The specialist investor backed Merdeka $25 million this September, and Greenko Ventures $33 million last August. It acted as sole arranger and lender in a Term Loan Facility for both companies.
Real estate mezzanine:
USA and Canada:
- HFF arranges first mortgage and mezzanine financing totaling $265 million for Church Park in Boston’s Back Bay
- A property investment arm of the Samsung Group will raise 300 billion won ($270 million) from South Korean insurance companies and pension funds in a real estate mezzanine fund that focuses on commercial buildings in major U.S. cities, according to investment banking sources on Sept. 13.
- Boston Residential Group has announced it recently completed the refinancing of Church Park Apartments in Back Bay. The $265 million transaction replaces debt financing from Freddie Mac. The deal includes a loan from AIG and mezzanine debt from JP Morgan Asset Management. Church Park Apartments is a luxury apartment building with 508 units and 75,000 square feet of retail space.
- Vanbarton Group provided a $39 million mezzanine loan for the development of The Assemblage, a $160 million mixed-use development at 17 John Street. The property sits between Broadway and Nassau Street in the Financial District, just east of the World Trade Center and the new Fulton Transit Center.
- Mainstreet Health Investments announced investment in five mezzanine loans with purchase options for seniors housing and care properties development projects located in Arizona, Colorado and Nebraska for US$16.6 million.
- Ready Capital Structured Finance, a nationwide commercial real estate bridge and mezzanine lender, announces the closing of Bristol Place Shopping Center in Santa Ana, California for the approximate funding of $19.9 million. Ready Capital Structured Finance closed the non-recourse interest-only loan that features a three-year term and one-year extension option, flexible pre-payment and includes a facility to provide for the future funding for capital expenditures, tenant improvements and leasing commissions.
- Business Capital announced that it structured and delivered a $25 million mezzanine loan for an agricultural land and real estate development company. Business Capital’s client is a third generation farmer who has been involved in agriculture and real estate development for over 30 years. He successfully acquired a portfolio of land in the Central Valley of California, including over 17,000+ acres used to farm cherries, apricots, peaches, almonds, and for grazing.
- Toys “R” Us Inc. received a tentative offer for an $88 million financing deal that requires the toy retailer to raise as much as $512 million in the commercial mortgage-backed securities market. The nonbinding letter of intent covers a five-year mezzanine facility for the Toys “R” Us Property Company II unit, according to a regulatory filing.
- This year, commercial real estate investors saw CMBS retreat as a financing solution, while alternative lenders stepped in to fill the gap. For private equity firms, debt and mezzanine financing in particular has become a very active niche business. Most alternative lenders are structuring deals in the 500 to 600 basis points range. “The lowest and highest would be 400 over LIBOR to 700 over LIBOR, about 4.5 percent to 8.5 percent,” says Will James, vice president of debt and equity production at NorthMarq Capital, a debt and equity provider for commercial real estate investors.
- Real estate mezzanine funds among most active fundraisers in European real estate fund universe according to PERE.
- Self-managed super funds are now a major source of credit to Australian property investors, taking over from banks which are subject to restrictions governing lending to real estate investors. New research from Credit Suisse equity strategist Hasan Tevfik finds that the $622 billion self-managed super fund sector is a significant lender to property through senior debt, mezzanine debt and preferred equity.
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