This article is from the Australian Property Journal archive
THE real estate portfolio value of Rubicon Europe Trust has fallen by €104.5 million or 15.5% in the six months to June 30 2008.
Eight properties were revalued at €568 million down from December 31 2007 carrying value of $672.5 million. Te properties were purchased between December 2005 and March 2007 for a total price of €586.3 million.
REU said the anticipated consequences of the asset revaluations are in the case of the note facility (RFE II), where a breach of the financial covenants will result in there being an event of default.
If the trust cannot pay the principal amount outstanding under the notes issued, each noteholder can claim under the guarantees. In the note facility there is no cross default provision unless insolvency proceedings including NAB appointing a receiver under its security.
REU said enforcement of the guarantees and an event of default under the CS facility or the RFE II note facility will each constitute an event of default under the NAB Corporate facility. If the event of default subsists NAB may declare that all amounts owing under the NAB Corporate facility are immediately due and payable, and results in RET I and RET II being unable to pay distributions to the unitholders.
REU is currently in discussions with the noteholders of the RFE II facility and CS (the warehouse debt provider to RFE) in relation to a restructuring of the financial covenants and the financial parameters of the respective debt facilities/securities. REU is also in discussions with NAB (the lender under the Corporate Facility) in respect of replacing the 364 day revolver with a longer term facility.
REU shares traded 1.9 cents lower at 77 cents yesterday.
Australian Property Journal
