Time is running out on bridging loan for Britain's most expensive building

Time is running out on bridging loan for Britain's most expensive building


Just by standing amongst the towering skyscrapers in Canary Wharf you can feel it is the place where wealth and success live and die. It is a world apart from the rest of London. Instead of old, small and understated, it is huge, sleek and modern.

 However, these gargantuan pillars of success are not impervious to the credit crunch.


The Spanish property company Metrovacesa bought the skyscraper form HSBC in April 2007 for an immense £1.1 billion, making it Britain’s most expensive building.


After all the financial turmoil of recent days Metrovacesa is anxiously trying to sell the HSBC tower in Canary Wharf  in order to help repay an £810 million bridging loan that expires at the end of November.


Goldman Sachs is advising the Spanish company and presently trying to find investors. Is it a case of the blind leading the blind?


However, HSBC is also looking for ways to take over the building, perhaps by buying it back or by finding a third party investor among its clients. The sale of all, or part of the building is an attempt in raising equity to help meet the terms of a refinancing deal for the bridging loan.


According to an article in the Financial Times yesterday, HSBC is thought to have offered senior debt of £600 million, leaving Metrovacesa with the task of making up £200 million with equity and mezzanine debt. The Spanish company is now considering all options to help it meet the refinancing package.


Metrovacesa, like many other companies in Spain, is trying to stay out of administration following last year’s collapse in the residential housing market and subsequent turbulence in the economy.


An HSBC spokesman said to the FT, “We provided a bridging facility of £810 million toward the £1.09 billion price.” He continued to say that the facility matures towards the end of next month.


This all comes at a bad time for Canary Wharf as Songbird Estates sings about its loss in profits due to the credit crunch and fall of Lehman Brothers. There has be light at the end of the tunnel as there will always be businesses that need office space - although Canary Wharf may see a shift from bankers and those in the finance sector to those in retail.



Kate Dudley

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