Lone Star Partners has tapped J.P. Morgan, Bank of Montreal and Wells Fargo Bank for the largest real estate subscription facility to date, according to LMW sister publication Real Estate Finance & Investment. The $1 billion facility will be used for the firm's $2.5 billion Lone Star Fund IV. The largest real estate subscription facility previous to this was an $800 million facility provided by J.P. Morgan to the Morgan Stanley Real Estate Fund IV International, which was completed last August. Calls to John Grayken, general managing partner of Lone Star, were referred to Owen Blicksilver, a spokesman, who declined to comment.
The banks are looking for about 25 participants to round out the line, a J.P. Morgan official said. J.P. Morgan has a longstanding relationship with the Dallas-based private investment partnership and led its last two transactions. The three-year facility is priced at LIBOR plus 7/8%, standard subscription facility pricing. He declined to disclose up-front fees.
J.P. Morgan will be acting as lead arranger and administrative agent. Bank of Montreal will be acting as syndication agent while Wells is acting as documentation agent. Syndication is expected to close in three weeks. The banks have already received about $250 million in commitments prior to the meeting, the official said, declining to elaborate. Leslie Eckstein executive v.p. at Wells and David Rubin, managing director at Bank of Montreal, did not return calls.