Northwood Investors’ rival 11th-hour bid to seize control of the 16-strong €306m-valued Castle Market Irish Dublin office portfolio has been rejected by the special servicer responsible for the matured securitisation, after the preferred bidders Kennedy Wilson and Varde Partners threatened to withdraw its offer.
Late on Tuesday evening, Northwood posted a notice via Bloomberg of a rival bid amounting to €311m – with improved recovery prospects for the junior bondholders in the Opera Finance (CMH) CMBS, ahead of a vote this week which was set to rubberstamp Kennedy and Varde’s win.
However, within the last hour, special servicer Hypothekenbank Frankfurt for the matured CMBS loan, has issued a statement outlining that Northwood’s 11th hour bid will not be considered.
In the statement, Hypothekenbank Frankfurt wrote that following Northwood’s statement on Tuesday evening “52% (by value) of Class A Noteholders and 34% (by value) of Class B Noteholders have written to the special servicer to express their concern regarding the potential negative impact the Northwood proposal may have on the process the special servicer and the preferred bidder are engaged in.
“These Noteholders made clear that closing the preferred bidder’s proposal should not be jeopardised at this stage for any reason. They also stated in writing that they would not support the Northwood proposal and, as a consequence, the Northwood proposal is not capable of being consummated.”
However, Northwood Investors is expected to contest Hypothekenbank Frankfurk’s attempt to block its rival bid, as the proportion of aggrieved noteholders considerably lower than supporters of Kennedy’s bid three weeks ago.
Hypothekenbank Frankfurt added that Kennedy and Varde had confirmed, “that it would withdraw its preferred bid in the event the special servicer takes any steps to engage with Northwood on its restructuring proposal. Material cost indemnity obligations may be triggered in the event the preferred bidder withdraws in such circumstances.
“Taking into account the matters referred to above,” continued the statement, “the special servicer intends to continue to consummate the sale of the properties to the preferred bidder”.
An EGM to rubberstamp Kennedy and Varde’s preferred bid will be held on 26 June, with the majority of votes expected to be registered by end of play tomorrow.