Bondholders of a £200m loan to Alburn Real Estate Capital will meet in September to vote on a restructure of the company’s debt facility after the loan breached its LTV covenant in April.
Noteholders will vote to force the company to sell at least £50m of properties to help remedy the covenant breach.
Other proposals include an amendment to the LTV ratio covenants and interest cover ratio covenants.
Alburn’s loan was secured against a portfolio of properties valued at £250m in 2007.
However, a revaluation by CBRE on 20 April valued the portfolio at £139m – a 44% decline.
The revaluation triggered a loan-to-value covenant breach which was not fixed by Alburn by the deadline of 12 August, causing a loan event of default.
