A slice of the £415m underwater debt pile backing Fordgate’s Fox portfolio is up for sale.
French bank Natixis is offloading its non-securitised B-loan, which was originally valued at £136m, for an indicative price of around £20m.
Ownership of the B-loan comes with the right to pay off investors in the £262m securitised senior loan, which matured and went into technical default in October last year, to take the senior lending position.
Due to amortisation this would require a circa £255m payment.
The owner could then enforce on the loan to take control of the 21-strong UK regional portfolio, owned by Moises and Mendi Gertner’s private property company Fordgate.
There is also a £17m C-loan secured against the portfolio, although typically any rights attached to this position would rank junior to the B-loan.
Natixis is running the process in house and is expected to draw in interest in the loan from private equity firms and distressed debt investors this week.
The Fordgate Commercial Securitisation No 1 has been on the watch list of investors and debt specialists since it went into default. A restructuring or workout was expected ahead of bond legal maturity in October 2016.
In 2006, the 2.5m sq ft portfolio was valued at £450m when £415m was lent against it. This comprised a £262m securitised senior loan and the £136m B and £17m C loans. The whole loan reflected a loan-to-value ratio of 85%. In November 2013 the portfolio was valued at £248.5m.
The agency CMBS was part of the book of transactions transferred to loan servicer Mount Street through its purchase of Morgan Stanley Mortgage Servicing.
The latest available valuation by Knight Frank put the market value of the Fox portfolio at £248.5m as at November 2013. The 2.5m sq ft portfolio comprises six offices, including three in Aberdeen, and the 94,000 sq ft in Southwark, SE1; six motor showrooms; two retail parks; an empty distribution centre and a multilet retail site in a number of locations across the UK. In September last year gross rents on the portfolio came to a total of £24.8m – up from £24m a year earlier – following a rise in occupation at Friars Bridge Court from 75% to 90% as well as improving rental values in the strong Aberdeen market.
Fordgate portfolio: at a glance
The latest available valuation by Knight Frank put the market value of the Fox portfolio at £248.5m as at November 2013. The 2.5m sq ft portfolio comprises six offices, including three in Aberdeen, and the 94,000 sq ft Friars Bridge Court in Southwark, SE1; six motor showrooms; two retail parks; an empty distribution centre and a multilet retail site in a number of locations across the UK. In September last year gross rents on the portfolio came to a total of £24.8m – up from £24m a year earlier – following a rise in occupation at Friars Bridge Court from 75% to 90% as well as improving rental values in the strong Aberdeen market.
bridget.oconnell@estatesgazette.com
