Debt restructuring advisers are circling the £300m Fox portfolio ahead of a CMBS maturity deadline on 21 October.
The 21-strong UK regional portfolio, owned by Moises and Mendi Gertner’s private ?property company, Fordgate, has a £262m senior loan maturing this week with limited prospects of securing a refinancing unless the borrowers agree to an equity injection.
Ratings agency Fitch ?estimates the securitised senior loan reflects an LTV of around 87% while the whole loan balance reflects an LTV of 130%.
The portfolio is likely to be subject to “a managed disposal process”, which could be undertaken after the appointment of an LPA receiver, said Fitch.
Bondholders, which include one US investment bank, such as Citibank or Bank of America Merrill Lynch, have been approaching restructuring specialists including Cairn Capital about workout proposals. This would allow them to maximise their investment during the tail period between the loan maturity and the bond maturity in October 2016.
It is understood that there is only a modest number of bondholders – around 15 – and that trading of the bonds has been limited, so they will be held mostly by legacy investors.
Following the expected default of the loan at maturity, Fitch said that cash previously being used to pay interest on debt ranking subordinate to the securitised loan and the borrower’s interest rate swap costs would probably be invested in a capital expenditure programme.
The 2.5m sq ft portfolio ?comprises six offices, including three in Aberdeen and the 94,000 sq ft Friars Bridge Walk in Southwark, SE1, ?six motor showrooms, two retail parks, an empty distribution centre and a multilet retail site.
Gross rents on the portfolio are £24.8m – up from £24m a year ago – following a rise in occupation at Friars Bridge Court from 75% to 90% and improving rental values in the strong Aberdeen market.
Morgan Stanley is the special servicer.
bridget.oconnell@estatesgazette.com
