Kennedy-Wilson Holdings, Inc. (NYSE:KW) and Fairfax Financial Holdings Limited (TSX:FFH) entered into an agreement to acquire Portfolio of 74 Real Estate Construction Loans from Pacific Western Bank for approximately $2.4 billion on May 19, 2023. The purchase price of approximately $2.4 billion, subject to customary prorations and adjustments, (i) will be paid to Pacific Western to acquire a total of approximately $2.6 billion in aggregate principal balance that is currently outstanding under the Loans; and (ii) is the price for the entire portfolio of Loans and may not necessarily be reflective of the price paid for any individual loan. Kennedy-Wilson has entered into an agreement with Fairfax to together purchase 63 of the Initial Loans (73 of the loans in the Portfolio for which Kennedy-Wilson has waived its due diligence condition). The purchase price for such 63 Initial Loans and the Additional Loans (PacWest two additional real estate construction loan with an aggregate principal balance of approximately $144 million) is a total of approximately $2.1 billion of which Fairfax will fund 95% and Kennedy-Wilson will pay 5% of the purchase price along with the future funding obligations. In addition, as part of the acquisition Kennedy-Wilson will earn customary asset management fees from Fairfax. The portfolio of 74 real estate construction loans is with an approximate $2.6 billion aggregate principal balance currently outstanding. Kennedy-Wilson or its designees will also assume all remaining future funding obligations under the acquired loans of approximately $2.7 billion. In connection with the transaction, Kennedy-Wilson will deposit a total of $20 million into a third-party escrow account that will be refundable back to Kennedy Wilson until it waives due diligence in accordance with the terms of the agreement. As on June 8, 2023, Kennedy-Wilson Holdings, Inc. and Fairfax Financial Holdings completed the acquisition of 53 of the Loans (the ?Initial Closing?). The purchase price paid for such 53 Loans was a total of approximately $1.6 billion, was paid to PacWest to acquire a total of approximately $1.8 billion in aggregate principal balance that is currently outstanding under the Initial Loans (with remaining future funding obligations of approximately $1.4 billion).

The transaction is subject to Kennedy-Wilson's satisfactory completion of customary due diligence, Pacific Western Bank securing certain counterparty consents and waivers, and other customary closing conditions. The transaction is currently expected to close in multiple tranches during the second and early part of the third quarter of 2023. Farshad E. Morè, Danielle Katzir, Deborah Cussen, Jon A. MacDonald, Jason J. Cabral, Brian W. Kniesly, Jeffrey C. Krause and Abbey Hudson of Gibson, Dunn & Crutcher LLP acted as legal advisors to buyers. Benjamin R. Weber of Sullivan & Cromwell LLP acted as legal advisor to Pacific Western Bank.

Kennedy-Wilson Holdings, Inc. (NYSE:KW) and Fairfax Financial Holdings Limited (TSX:FFH) completed the acquisition of Portfolio of 74 Real Estate Construction Loans from Pacific Western Bank on July 7, 2023.