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Fairfax Financial Takes 95% Stake in PacWest Construction Loan Portfolio
Toronto-based Fairfax Financial Holdings Limited will acquire an approximately 95% interest in the 74 real estate construction loans that Kennedy Wilson Holdings has agreed to acquire from PacWest Bancorp. Fairfax is also making a $200-million preferred equity investment in Beverly Hills-based Kennedy Wilson.
The total purchase price for the loans is approximately US$2.1 billion, of which Fairfax will fund 95%, approximately $2.0 billion. The aggregate principal balance currently outstanding under the loans is approximately $2.3 billion.
“We are excited to continue our great partnership with Kennedy Wilson, led by Bill McMorrow, and to acquire an interest in a stable and attractive loan portfolio that further strengthens the foundation of interest and dividend income-generating assets that will benefit Fairfax over the next two to three years,” said Prem Watsa, Chairman and CEO of Fairfax.
In the preferred equity investment, Fairfax will acquire perpetual preferred stock carrying a 6.0% annual dividend rate.
Pictured: Kennedy Wilson headquarters in Beverly Hills.
- ◦Sale/Acquisition
