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U.S. investment firm Aetos’ 900 billion yen ($8.6 billion) plus bid for Japanese property developer Daito Trust Construction Co (1878.T: Quote, Profile, Research) is moving forward but struggling to secure enough capital from banks, financial sources familiar with the matter said.

Aetos Capital LLC’s consortium, comprising real estate group Mori Trust Co and local private equity firm Unison Capital, have been left in the lurch by Sumitomo Mitsui Banking Corp (SMBC), the lending arm of Japan’s Sumitomo Mitsui Financial Group (8316.T: Quote, Profile, Research), which has decided not to help fund the deal, the sources said.

Other banks that Aetos has asked for loans, including Bank of Tokyo-Mitsubishi UFJ, Mizuho (8411.T: Quote, Profile, Research), Shinsei (8303.T: Quote, Profile, Research), Deutsche Bank (DBKGn.DE: Quote, Profile, Research) and Aozora (8304.T: Quote, Profile, Research), are still pondering how much they want to commit to the deal.

Nomura Capital Investment Inc, wholly owned by Japan’s largest brokerage Nomura Holdings Inc (8604.T: Quote, Profile, Research), is also considering stepping into the breach to help finance the buyout; but it is not clear whether it will be willing to shore-up the financing completely payday loan.

Both Aetos and Sumitomo Mitsui Financial Group could not be immediately reached for comment.

Among other issues, the prospective lenders are uneasy because Sumitomo Mitsui Financial Group has historical ties to Daito, and is familiar with the inner workings of the company.

Another concern for the lender banks is that market conditions for condominium makers have deteriorated in recent months and vacancy rates may start to rise.

Daito Trust’s core business is to build, lease and manage apartment blocks and if vacancy rates rise, it would be left with a cash-flow shortfall. 

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