Catalyst Capital poised to clinch deal in Clichy

Catalyst Capital is believed to be close to clinching a deal for an office complex in Clichy near Paris. The complex, Front de Parc, is part of a CMBS loan that is due to mature in November 2011 and is currently being unwound.

According to well-informed sources, Catalyst Capital is paying between EUR 85 mln and EUR 90 mln for the failed loan which which was originated by Barclays Bank and securitised in May 2007 by its special servicing unit, Barclays Capital Mortgage Servicing (now Capita Asset Services) as part of the larger Juno 'Eclipse 2007-2' Ltd CMBS transaction.

The deal follows two years of protracted negotiations with the special servicer and bondholders. The original owner, UK investment fund Cambridge Place, defaulted on the loan after the main tenant, Fnac, vacated the premises in June 2008, causing the vacancy rate to rise to 40%. The owner was subsequently unable to fork out the money needed to refurbish the office space to attract a new tenant, put at some EUR 14 mln in a Juno company report.

The sum Catalyst is believed to be paying for the property is roughly 20% higher than a valuation of EUR 69 mln carried out in July 2009 by CBRE, but significantly lower than the original loan sum of EUR 113 mln. According to sources, the purchase will wipe out the total investments of a significant number of bondholders in the Juno securitisation. Bondholders of the lower EUR 6 mln Class E tranche and a good portion of bondholders in the EUR 41 mln Class D tranche are expected to take hefty losses on the sale.

Both Catalyst Capital and Barclays Bank declined to comment on the report.

The transaction would mark Catalyst's fourth acquisition within a year following the purchase in April of the Weißeritz-Park in Freital near Dresden for EUR 25 mln on behalf of its Catalyst European Property Fund.