[*Spaniards may lose HSBC Tower over debt * (https://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/27/cnhsbc127.xml )
By Jonathan Russell
Spanish ownership of the £1.1bn HSBC Tower is under threat after it emerged the owners were struggling to meet a deadline to refinance debt on the building.
Metrovacesa, the Spanish property group that bought the tower from HSBC for £1.1bn last year, is believed to be struggling to raise the extra equity to refinance the £810m short-term loan HSBC underwrote to finance the deal.
Although the Spanish group said last week it was working to put together a syndicate of banks to take on the debt, a report in this month’s edition of property magazine EG Capital claims Metrovacesa has already informed HSBC it has not raised the necessary equity.
A Metrovacesa insider said: “We are negotiating on different proposals with HSBC. The latest proposal is to get a syndicated loan.”
If Metrovacesa fails to refinance the loan, HSBC could take possession of the building, now worth an estimated £950m. The short-term loan, which has no recourse to Metrovacesa, is due to expire in November, but it has also emerged that the two parties have set an informal deadline of the end of June to complete the deal.
In Metrovacesa’s accounts for year ended December 31, 2007, the group had already written down the value of the building to £1bn.
Didn’t they purchase the HSBC building at about the same time as Quinlan Private bought the Citigroup building? I wonder what the financing on that looks like.
verbatim:
By Jonathan Russell
Spanish ownership of the £1.1bn HSBC Tower is under threat after it emerged the owners were struggling to meet a deadline to refinance debt on the building.
Metrovacesa, the Spanish property group that bought the tower from HSBC for £1.1bn last year, is believed to be struggling to raise the extra equity to refinance the £810m short-term loan HSBC underwrote to finance the deal.
Although the Spanish group said last week it was working to put together a syndicate of banks to take on the debt, a report in this month’s edition of property magazine EG Capital claims Metrovacesa has already informed HSBC it has not raised the necessary equity.
A Metrovacesa insider said: “We are negotiating on different proposals with HSBC. The latest proposal is to get a syndicated loan.”
If Metrovacesa fails to refinance the loan, HSBC could take possession of the building, now worth an estimated £950m. The short-term loan, which has no recourse to Metrovacesa, is due to expire in November, but it has also emerged that the two parties have set an informal deadline of the end of June to complete the deal.
In Metrovacesa’s accounts for year ended December 31, 2007, the group had already written down the value of the building to £1bn.
Didn’t they purchase the HSBC building at about the same time as Quinlan Private bought the Citigroup building? I wonder what the financing on that looks like.
This shows you that we are wrong to trust the opinions of people high up in organisiations. At the time they were doing this deal I remember being completely exasperated telling my wife that I just couldn’t understand the logic of buying this at the very top of the bubble. I said that the decision makers couldn’t have done even the smallest amount of research.
I often think the same myself but then as it was pointed out to me I don;t stand to make a 6/7 figure bonus contingent on the deal happening. If I did… well maybe then you could call me Parlon.
