This article is from the Australian Property Journal archive
TWO Record Realty properties, including the ASX Building at 20 Bridge Street in Sydney may have breached bank covenants, an Allco mortgage trust warns.
Allco Max Securities & Mortgage Trust provides loans to special purpose vehicles established for the purpose of refinancing two Record Realty property transactions, the ASX Building at 20 Bridge Street, Sydney CBD and the Gosford Workcover Head office, Gosford, New South Wales.
As at June 30, MAX held $100.5 million of loan notes which are indirectly secured over the Bridge Street property and $35.5 million of loan notes which are indirectly secured over the Gosford property.
The ASX Building was last valued at $250 million and the Gosford office at $50 million.s
MAX yesterday said it has been informed that re-valuations for these two properties (as at June 30 2008) are lower that than the valuations as at December 31 2007.
MAX has not formally been provided with these re-valuations under the loan transaction documents.
“However, MAX considers that the re-valuations may cause, or may have already caused, issues under the financial covenants for these loans, including breaches of loan-to-value undertakings which may lead to review events and/or events of default,” the mortgage trust warns.
“Despite the lower valuations of these properties, given the secured priority position held by MAX, we do not consider any of the loan notes to be currently impaired.
“We are considering our position in relation to these loans and the options available to us. We are also considering the impact of this on our current and ongoing compliance with our portfolio tests. We will continue to monitor the situation and will update the market when more information is available,” MAX concluded.
Meanwhile, Record Realty said result are indicative values, which are currently being finalised.
The trust added that in anticipation it is well advanced in its discussions with its major financier, BOS International (Australia) Limited (BOSI) regarding arrangements to work through a potential breach of any financial covenants under the relevant financing arrangements.
Record Realty shares fell 1 cent to close at 3 cents.
Australian Property Journal
