Swiss bank Credit Suisse is reportedly close to selling EUR 2.3 bn of loans with Dutch property as collateral, to US private equity firm Lone Star. The bank granted the loans in 2007 following two major office deals in the Dutch market.
Swiss bank Credit Suisse is reportedly close to selling EUR 2.3 bn of loans with Dutch property as collateral, to US private equity firm Lone Star. The bank granted the loans in 2007 following two major office deals in the Dutch market.
One involved the sale of a portfolio of 72 office buildings (totalling some 500,000 m2, debt: EUR 1.201 bn) from Bankhaus Wölbern to Fordgate, the property vehicle of the Jewish Gertner family. The other stemmed from the sale several months earlier of the 99 properties (totalling some 550,000 m2, debt: EUR 1.1 bn) from the MPC portfolio to Breevast and the now ailing US insurer AIG.
At the time, both transactions ranked among the biggest office deals ever in the Netherlands and marked the peak of the Dutch investment market which in 2007 totalled nearly EUR 14 bn.
At the time, Credit Suisse planned to securitise both loans as CMBS mortgages and sell them on. Well-informed sources contacted by PropertyEU claim that only 60-70% of the MPC loan has been securitised and that the securitisation of the Wölbern loan was aborted following the collapse of the CMBS market in the wake of the worsening credit crisis in autumn last year.
UK-based property magazine EuroProperty claims the mooted buyers are not willing to pay more than 70% of the nominal value of the loan. Lone Star is unwilling to pay even that for the MPC and Wölbern portfolio which mainly comprises older offices with relatively high vacancy rates. EuroProperty claims Lone Star is not willing to pay more than EUR 1 bn for EUR 2 bn-plus property loans, implying a devaluation of more than 50% of the underlying real estate.
Should Credit Suisse go ahead with the sale to Lone Star, it would then suffer a direct book loss of several hundred million euros.
