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 purchase from PacWest Bancorp. Additionally, Fairfax is making a $200 million preferred equity investment in Beverly Hills-based Kennedy Wilson.
The total purchase price for the loans is estimated at US$2.1 billion, of which Fairfax will fund 95%, or approximately $2 billion. The aggregate principal balance currently outstanding under the loans stands at roughly $2.3 billion USD .
Prem Watsa, Chairman and CEO of Fairfax commented on this transaction: “We are delighted to continue our partnership with Bill McMorrow and Kennedy Wilson by acquiring an interest in a stable loan portfolio that further bolsters our foundation of income generating assets over the next two to three years.”
In connection with this deal, Fairfax acquires perpetual preferred stock carrying a 6% annual dividend rate as part of their preferred equity investment into Kennedy Wilson headquarters located in Beverly Hills .
