UK banking giant Halifax Bank of Scotland (HBOS) has helped shore up the capital structure of its real estate partner Kenmore Property Group, after a £500 mln (EUR 589 mln) UK joint venture failed to meet debt payments due to a drop in the value of UK property, the Financial Times has reported. HBOS co-invests in two property joint ventures with Kenmore, in addition to providing debt at both a fund and corporate level to the company. According to the paper, HBOS and Kenmore have restructured the funds' capital structure and agreed lighter covenants.
UK banking giant Halifax Bank of Scotland (HBOS) has helped shore up the capital structure of its real estate partner Kenmore Property Group, after a £500 mln (EUR 589 mln) UK joint venture failed to meet debt payments due to a drop in the value of UK property, the Financial Times has reported. HBOS co-invests in two property joint ventures with Kenmore, in addition to providing debt at both a fund and corporate level to the company. According to the paper, HBOS and Kenmore have restructured the funds' capital structure and agreed lighter covenants.
The UK partnership with £500 mln of assets, has breached a loan-to-value covenant, the paper said. The £310 mln European partnership has not, but is also part of the restructuring agreement. The paper said that both funds are launching a disposal plan for the coming years.
Kenmore, headquartered in Edinburgh, buys, develops and sells residential and commercial property in the UK. Kenmore Europe is a joint venture of Kenmore, HBOS and Revcap.
