Capital & Regional and Area Property Partners have failed to pass a loan to value test on a EUR 158 mln loan for their German portfolio 4 joint venture which was set as a condition last summer for extending the loan by another year. The LTV test formed part of a restructuring agreement between the joint venture partners and loan servicer Hatfield Philips.
Capital & Regional and Area Property Partners have failed to pass a loan to value test on a EUR 158 mln loan for their German portfolio 4 joint venture which was set as a condition last summer for extending the loan by another year. The LTV test formed part of a restructuring agreement between the joint venture partners and loan servicer Hatfield Philips.
The loan, which forms part of the Talisman-6 Finance PLC CMBS, will now go into special servicing, Capital & Regional said in a statement on Friday. Of the EUR 158 mln debt, some EUR 18 mln comprises junior debt, which is owned by the joint venture partners.
Capital & Regional and Area Property Partners each hold a 50% interest in the German retail property portfolio which is managed by Garigal Asset Management. The EUR 158 mln loan is secured on 22 of the 45-strong portfolio.
Capital & Regional said the rest of the German joint venture is covenant-compliant with lower gearing and continues to trade well, comprising assets with longer lease lengths which are largely let to food retailers with strong covenants.
Capital & Regional said that any adjustment arising from this default will not have a material effect on the company’s half-year figures, adding that it would continue to work ‘closely and constructively’ with Hatfield Philips.
Capital & Regional is a specialist property company with a focus on developing asset management opportunities in town centre shopping centres and out of town retail parks.
