Private Credit Gives European Banks Backdoor into Property Deals
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Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000Back leverage, an increasingly popular form of financing, is raising concerns that creditor protections are being erodedThe redevelopment site of 75 London Wall, the former Deutsche Bank headquarters, in the City of London on Dec. 9.When developers needed an extra £500 million ($671 million) for a state-of-art revamp of Deutsche Bank AG’s former London headquarters this year, adding a roof garden and three stories on top, the financing didn’t come from a regular commercial real estate loan.Instead, the money arrived via a multi-layered structure set up by NatWest Group Plc and Cheyne Capital Management that’s become an increasingly popular form of financing in Europe. Known as back leverage, the complex and relatively opaque system allows banks to apply more favorable capital treatment to their lending.