Lancashire-based investor Tim Knowles is in advanced talks with lenders to restructure a loan secured against a £73m industrial portfolio.
Capita Asset Services put the loan, called Bacchus, into special servicing in August after income from the portfolio became insufficient to meet quarterly debt repayments of £133,125 plus interest. A £1m reserve account to cover any shortfalls had been emptied by April.
Knowles is considering a debt restructuring along the lines he proposed for the Epic Industrious CMBS vehicle earlier this year. This aimed to provide the best return for bondholders by stabilising and managing the loan rather than selling the property it supports. New equity would have been injected into the portfolio to do this.
Industrious was sold by its receivers to Nick Leslau’s Max Property for £232m.
The Bacchus loan, which had a balance of £69.5m in October, was packaged up with 18 other Credit Suisse loans in 2007 and securitised as part of a £778m CMBS managed by Capita. Maturing in 2011, it comprises a securitised A-loan of £54m and a £15.5m junior loan, which is also outstanding.
In a report to bondholders last month, Capita said: “Initial discussions have taken place and upon receipt of the valuation the borrower will provide us with proposals for the loan and properties.”
Knowles confirmed: “We are in special servicing, and in negotiations to restructure the Bacchus loan.”
The portfolio of 14 industrial estates in England and Scotland was valued at £73m in October, down from £83.4m in 2007. Passing rent at the time of the securitisation was £5.7m, but rising vacancy rates meant that this had fallen to £4.4m by this October.
Assets in the 1.8m sq ft portfolio, managed through Knowles’ First Investments, include the 540,000 sq ft Gateway Business Park in Gilberdyke, Yorkshire, and the 450,000 sq ft Windrush Industrial Park in Witney, Oxfordshire.
patrick.clift@estatesgazette.com
