Dealmaker: Paramount Group Refinances 1633 Broadway for $1B

Paramount Group, New York, refinanced 1633 Broadway, a 2.6-million-square-foot Manhattan office building, for $1 billion.

Eastdil Secured LLC, New York, secured the financing. Landesbank Baden-Württemberg New York Branch, Landesbank Hessen-Thüringen Girozentrale, DekaBank Deutsche Girozentrale, ING Capital LLC and Wells Fargo Securities LLC served as joint lead arrangers.

The seven-year interest-only loan at LIBOR plus 175 basis points can be increased at Paramount Group’s option to $1.25 billion during the first three years. The firm used the net proceeds to repay the existing $926 million loan and fund $42 million of swap breakage costs. The existing 5.35 percent loan would have matured in December 2016.

Paramount also entered into interest rate swap agreements with an aggregate notional amount of $1 billion fixing the LIBOR at 1.84 percent. Thus the loan’s interest rate will remain fixed at 3.59 percent and the effective interest rate (including amortization of fees) will remain 3.87 percent through December 2021 when the interest rate swaps begin to expire.

Built in 1970 between 50th and 51st Streets, the 48-story Midtown Manhattan tower known as Paramount Plaza houses two Broadway theaters.