Caisse de Depot et Placement du Quebec, Canada’s biggest pension-fund manager, may lose 285 million pounds ($462 million) on debt secured against investor Simon Halabi’s London properties after their value fell about 50 percent, according to two people familiar with the situation.
Caisse de Depot holds the junior portion of a 1.45 billion- pound loan secured against Halabi’s nine office properties, said the people, who declined to be identified because the information isn’t public. The senior portion of the loan, 1.15 billion pounds, was packaged into commercial mortgage-backed securities in 2006. Holders of the bonds, which are in default, rank first when the debt is repaid. Interest payments to the junior lender have already stopped.
“We’re pretty confident the CMBS route is the best route
available to us,” Sewell said in a phone interview from
Melbourne yesterday. “The bank syndicate option would come with
upfront charges as well as ongoing covenants, whereas CMBS,
whilst it is a little bit more restrictive, doesn’t have ongoing
covenant issues.”
About 44 percent of the rated Australian CMBS market, or
A$3.4 billion, is scheduled to mature in 2009, according to a
report by Fitch Ratings, creating a “maturity hump.”
Aug. 26 (Bloomberg) -- Tishman Speyer Office Fund, an Australian-based fund that invests in U.S. property, renegotiated terms on a revolving credit facility after the value of its real estate fell 33.5 percent.
...
The fund, whose 18 U.S. office properties lost a third of their value in the 12 months through June, “is walking a fine line on the liquidity front,” according to a report by JPMorgan Chase & Co. Sydney-based analysts Michael Scott, Rob Stanton and Richard Jones. They rate the Australian-traded shares “neutral.”
The new loan covenants would allow for another 7.7 percent decline in the fund asset values, which is ”not a large buffer in today’s environment,” the analysts wrote.
We're not going to name names, but rumor has it that someone is in big trouble - and the fact that Zeus is hurling bolts of lightning at your office is probably not a good sign.
Fitch analyzed the transaction and calculated expected losses by assuming cash flows on each of the properties decline 15% from year-end (YE) 2007 and property values decline 35% from issuance.
“We’re not in a desperate situation here,” Mr. McCaffery says. “There’s no intention on my or Barry Mansur’s part to let this hotel go.”
The problem, according to Mr. McCaffery, is that he can’t start restructuring negotiations until the loan falls into default. A CMBS borrower typically can seek relief only after a loan is transferred to a so-called special servicer hired to work out problem loans in the pool. That hasn’t happened yet with the Hotel Burnham loan.
The hotel could cover its monthly payments if necessary, Mr. McCaffery says, but “you can’t get their attention until you default.”
Lowe’s default to Kirkland, Washington-based Cascade came after Corus Bankshares Inc. of Chicago, Lowe’s construction lender, failed to supply a final $12.5 million payment to the developer, Diehl said. Corus said this month it may shut down as the bank’s nonperforming loans left it below capital levels required by U.S. regulators.
An $8 million loan to Lowe’s from the city of Rancho Palos Verdes has been delayed pending resolution of the company’s finances, Diehl said.
Corus didn’t fund Lowe’s loan because the Terranea project was “out of balance by millions of dollars” and the loan agreement required Lowe to raise additional equity capital before Corus made more payments, Dwight Frankfather, a Corus senior vice president, wrote in an e-mail. He declined to provide further details.
Calls to Cascade weren’t immediately returned.
A room with a king-size bed and ocean view showed a daily rate of $392 for an Aug. 21 through Aug. 23 stay, according to the Terranea Web site. The hotel is situated on 102 acres on the former site of the Marineland of the Pacific theme park, south of Los Angeles.
The commercial real estate services firm reports that $532 million worth of Commercial Mortgage Backed Securities (CMBS) in the Twin Cities, more than 9 percent of the $5.8 billion of CMBS loans in the metro area, are at least 30 days delinquent.
In the next 12 months, there are 49 properties with CMBS loans nearing $750 million coming due. A total of 87 properties are coming due in the next two years.
One major factor in the foreclosures: Many hotel loans are difficult to restructure because they were packaged into commercial mortgage-backed securities, or CMBS, which combine hundreds of property payments into one single bond. With scores of investors owning those bonds, it is extremely hard to cut a new deal to keep the hotel in owners' hands.This argument is getting tired. The investors own debt obligations of a Trust, of which, the hotel loan serves as collateral and has signed a contract obliging it to make monthly debt service payments as a result of putting a mortgage on their property. There is just ONE, 1, UNO, entity that they have to talk to in order to get debt relief or modify their loan - it is called the Special Servicer. Typically, the Master Servicer handles sending out bills and receiving payments, and as soon as it gets more complex than that, they engage the Special Servicer, who does heavy lifting such as loan modifications, foreclosures, appraisal and property management engagements, etc. The Special does not necessarily get engaged solely because a property is delinquent either - i.e. you can negotiate to prevent default! wow, that's surprising. Maguire did it just the summer with his Solana complex in Westlake - the master servicer said, and I quote, "transferring to special servicer for imminent default".
"There is no one person or two people that can really represent the interests of the borrowers and strike a deal," said Art Buser, chief executive of Sunstone Hotel Investors Inc., which is forfeiting one hotel and has put lenders on notice that it might do so with others.
| Deal | Loan | Size |
| GSMS 2007-GG10 | 550 South Hope Street | 165,000,000 |
| WBCMT 2005-C18 | Park Place II | 100,000,000 |
| CSMC 2007-C4 | 2600 Michelson | 95,000,000 |
| JPMCC 2007-LDP11 | Stadium Towers | 83,200,000 |
| GSMS 2007-GG10 | Maguire Anaheim Portfolio (500 Orange Tower) | 7,777,457 |
| BACM 2005-3 | Pacific Arts Plaza | 132,000,000 |
| BACM 2005-4 | Pacific Arts Plaza | 110,000,000 |
Aug. 3 (Bloomberg) -- Markit Group Ltd., the data provider majority-owned by Wall Street’s largest banks, is under Justice Department scrutiny for potential anticompetitive practices ranging from requiring customers to buy bundled services to restricting which trades can be cleared in the $26 trillion credit-default swap market.
Markit told a swaps clearinghouse customer to purchase a pricing service as a condition for granting use of its benchmark indexes, said a person with knowledge of the transactions. Markit permitted use of its indexes by another clearinghouse only if every swap guaranteed by the company included a dealer, such as one of its owners, said other people familiar with those negotiations.
Posts
All Comments
