Capital & Regional’s X-Leisure fund said it was talking to lenders about a potential refinancing of its Brighton Marina debt, following a rating agency’s warning. Standard & Poor’s said that X-Leisure may have trouble servicing the asset’s £40m loan, because repayments are going to rise by £100,000 per quarter from October. The loan matures in October next year. S&P said it was placing the lower tranches of the debt, which was securitised by Barclays in 2005, on “negative watch”. The agency said this was due to concerns about the borrower’s ability to pay off the loan following the rise in quarterly repayments as well as the “increased refinance risk of large leisure properties in the current finance environment”. According to S&P, six of the X-Leisure said in a statement: “The loan has an interest cover covenant of 110%. The actual interest cover during the second quarter of 2008 was 163%. Based on the interest cover, the Fund sees little difficulty in being able to meet the higher amortisation of £100,000 per quarter in the last year of the loan.” “The facility has a loan to value of 51% (but no LTV covenant) and expires in October 2009. The fund is taking the necessary steps, within its financing strategy, in addressing the future financing arrangements for Brighton Marina with its banking partners.” “The loan is non-recourse to Capital & Regional PLC as property and asset manager and Hermes as fund manager.” Brighton Marina is owned by the X-Leisure Fund, which is managed by Capital & Regional & Hermes. X-Leisure is the
Capital & Regional’s X-Leisure fund said it was talking to lenders about a potential refinancing of its Brighton Marina debt, following a rating agency’s warning. Standard & Poor’s said that X-Leisure may have trouble servicing the asset’s £40m loan, because repayments are going to rise by £100,000 per quarter from October. The loan matures in October next year. S&P said it was placing the lower tranches of the debt, which was securitised by Barclays in 2005, on “negative watch”. The agency said this was due to concerns about the borrower’s ability to pay off the loan following the rise in quarterly repayments as well as the “increased refinance risk of large leisure properties in the current finance environment”. According to S&P, six of the Marina’s tenants, that represent 16% of the rent roll, are currently in arrears. X-Leisure said in a statement: “The loan has an interest cover covenant of 110%. The actual interest cover during the second quarter of 2008 was 163%. Based on the interest cover, the Fund sees little difficulty in being able to meet the higher amortisation of £100,000 per quarter in the last year of the loan.” “The facility has a loan to value of 51% (but no LTV covenant) and expires in October 2009. The fund is taking the necessary steps, within its financing strategy, in addressing the future financing arrangements for Brighton Marina with its banking partners.” “The loan is non-recourse to Capital & Regional PLC as property and asset manager and Hermes as fund manager.” Brighton Marina is owned by the X-Leisure Fund, which is managed by Capital & Regional & Hermes. X-Leisure is the UK’s largest leisure property fund and is run by PY Gerbeau, the former boss of the Millennium Dome. chris.bourke@rbi.co.uk
