Hatfield Philips calls in Treveria’s €400m ‘Orange’ portfolio debt

Hatfield Philips International (HPI) has declined to grant Treveria a second 12-month loan extension on a CMBS loan securing a distressed 154-strong German retail portfolio, raising the prospect of a disposal of the assets in part or in whole.

The first 12-month loan extension expired last night, with Treveria publishing confirmation this afternoon that special servicer Hatfield Philips declining the second one-year option.

Hatfield Philips is expected to issue an announcement by the end of the day confirming that the special servicer reserves its right to seek immediate repayment of the outstanding €398.94m whole loan, of which €369.79m was securitised in the fruit-themed ABN Amro-issued Talisman 6 CMBS.

CoStar News understands that Hatfield Philips’ decision followed a review of the business plan which Treveria put forward along its asset management partner, IC Real Estate Group, which replaced Cushman & Wakefield 12 months ago.

Treveria also failed to meet the LTV and occupancy targets for the loan to enable the second loan extension.

On 31 May, the portfolio was valued at €411.74m, which puts the senior LTV at 89.8% and the whole loan LTV at 96.89%, while the portfolio has a vacancy rate of 24.42% and a weighted average lease length of 4.26 years.

This 96.89% whole loan LTV was above the covenant maximum of 85%, while the 75.58% occupancy rate was below the required 80%, under the terms of the Hatfield restructuring agreement.

Since the May valuation, three properties have sold for a combined €3.6m which takes the portfolio to its current 154 size. The portfolio’s total annual rent has decreased by €165,761 to €29.2m.

“Based on the above, the borrowers had failed to meet the extension conditions,” wrote Hatfiled Philips in the latest quarterly investor report.

In a stock market announcement, Treveria said: “HPI, on behalf of the finance parties, have demanded immediate payment and discharge of all secured obligations in full by the Silo E propcos and Treveria E S.a.r.l. and have reserved their rights in relation to any further action which may be taken.

“The board of Treveria is currently assessing its options and further announcements will be made in due course.”

IC Real Estate Group replace Cushman & Wakefield at the end of November 2011, in a manager switch which reflected a refocused strategy to centralise information so Treveria could closely oversee Munich-based IC’s property management, as part of a staggered asset sell-off is undertaken to reduce Treveria’s outstanding debt.

New property manager IC Real Estate Group set up in 1988, operates across eight offices in Germany and North America and manages an investment volume of around €8.5bn for more than 20,000 private and institutional investors.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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