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Overview

Bank of China provides a $260 million USD loan to Anbang Insurance for its acquisition of the 717 Fifth Avenue Office Condominium

Commitments (Constant USD, 2023)$272,011,579
Commitment Year•2015Country of Activity•United StatesDirect Recipient Country of Incorporation•United StatesSector•Business And Other ServicesFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
May 13, 2015
Start (actual)
May 21, 2015
End (actual)
May 21, 2015
Last repayment (originally scheduled)
May 12, 2018

Geospatial footprint

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The proceeds were to be used by the borrower to finance its acquisition of the 22-floor 353,000-square foot (35,200 square meter) office condominium space located on floors five to 26 at 717 Fifth Avenue (also known as the Corning Glass Works Building and the Merrill Lynch Financial Center), a 26-story office tower located at the intersection of 5th Avenue and east 56th Street in the Plaza District of Manhattan, New York City, New York; the acquisition excluded the luxury retail space at the building on floors one to four. More detailed locational information can be found at https://www.openstreetmap.org/way/265149190

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% Chinese ownership

Funding agencies

State-owned Commercial Banks

  • Bank of China (BOC)

Receiving agencies

Joint Venture/Special Purpose Vehicles

  • AB Stable VI LLC

Loan description

Bank of China provides a $260 million USD loan to Anbang Insurance for its acquisition of the 717 Fifth Avenue Office Condominium

Interest type•UnknownMaturity•3 years

Collateral

This loan was secured by a mortgage the 22-floor 353,000-square foot (35,200 square meter) office condominium space located on floors five to 26 at 717 Fifth Avenue), a 26-story office tower located in the Plaza District of Manhattan, New York City, New York.

Narrative

Full Description

Project narrative

On May 13, 2015, the Bank of China (BOC) entered into a $260,000,000 USD loan agreement with AB Stable VI LLC — a Delaware-incorporated special purpose vehicle (SPV) wholly-owned by Anbang Insurance Group Co., Ltd., a Chinese insurance company and conglomerate based in Beijing with a variety of owners, including several state-owned companies as China Petroleum & Chemical Corp (Sinopec) and SAIC as well as smaller, more obscure corporate investors — for its acquisition of the 717 Fifth Avenue Office Condominium. This loan carried a maturity period of three years with a two-year extension option. This loan was secured by (i.e. collateralized against) a mortgage on the office condominium space at 717 Fifth Avenue. The proceeds were to be used by the borrower to finance its acquisition of the 22-floor 353,000-square foot (35,200 square meter) office condominium space located on floors five to 26 at 717 Fifth Avenue (also known as the Corning Glass Works Building and the Merrill Lynch Financial Center), a 26-story office tower located at the intersection of 5th Avenue and east 56th Street in the Plaza District of Manhattan, New York City, New York; the acquisition excluded the luxury retail space at the building on floors one to four. The proceeds were used in part to retire (refinance) a $260 million USD outstanding balance of a $381 million USD mortgage put on the property in 2013 held by Wells Fargo Bank NA as trustee for GS Mortgage Securities Corporation II. The acquisition had a cost of about $415 million USD. On February 22, 2015, Anbang Insurance entered into a contract to purchase the office space at 717 Fifth Avenue from Blackstone Group. The acquisition closed on or just prior to May 21, 2015. In May 2019, Anbang repaid the $260 million USD acquisition loan from BOC. In June 2019, Anbang Insurance put the office condominium at 717 Fifth Avenue up for sale, looking for sale prices above $200 million USD — roughly half of $415 million USD price it to acquire the space in 2016. Anbang, which had acquired a plethora of overseas assets, had fallen under Chinese Government control in February 2018 amid allegations of illegal activity at the company; under this ownership, it was seeking to sell a number of assets. The office space at 717 Fifth Avenue specifically was believed to motivated by the unique tax structure of the property; Anbang had to pay property taxes based on the square footage of the office condo instead of the usual to the condo’s value relative to the building, giving Anbang a large and outsized portion of the property's tax bill. Anbang was reportedly unaware of this feature at the time of purchase.