Starwood fund enters loan with Citibank, pledges Tri Pointe stock

By Marisa Wong

Madison, Wis., Sept. 5 – VIII/TPC Holdings, LLC, a subsidiary of a private equity fund managed by an affiliate of Starwood Capital Group LP, entered into a credit agreement with Citibank, NA as administrative agent and a related security agreement and collateral account control agreement on Sept. 4, according to an 8-K filing with the Securities and Exchange Commission.

Under the loan documents, the Starwood fund has pledged the 11,985,905 shares of common stock of Tri Pointe Homes, Inc. that it holds as collateral in connection with a margin loan.

The scheduled maturity date of the margin loan is two years after its initial closing date.

The loan is designed to permit the borrower to obtain partial liquidity with respect to its investment in Tri Pointe Homes, while permitting it to retain beneficial ownership of the shares and participate in the future potential upside of Tri Pointe.

Under the credit agreement, the initial principal amount of the margin loan cannot exceed 50% of the value of the Starwood fund’s Tri Pointe shares at the time the loan is made. The borrower is required to maintain a minimum amount of overcollateralization for the loan, comprising the then-current value of the shares and, if necessary, additional collateral.

Under some circumstances relating to Tri Pointe or the value of its shares, the borrower may be obliged to repay the loan in full.

As of Thursday, the Starwood fund borrowed about $87 million under the credit agreement.

Starwood is a private investment firm based in Greenwich, Conn. TRI Pointe is an Irvine, Calif.-based homebuilder.

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