This article is from the Australian Property Journal archive
JAPANESE investment bank Nomura Holdings bought out the Lehman Brothers' Australian business, the deal likely to provide relief to Reed Property Group.
The Tokyo based investment bank has bought Lehman Brothers’ franchise in the Asia Pacific region including Japan and Australia.
The transaction is subject to a number of conditions and does not include any trading assets or trading liabilities.
The deal might give Reed Property Group a new backer since the collapse of Lehman.
The global investment bank is the second largest shareholder in the Reed Property Group, holding a 40% stake in the Reed Property Trust.
Earlier this month, Adviser Edge’s head of property search Louis Christopher said the failure of Lehman has removed an important source of financial strength from the responsible entity and the trust.
Lehman had previously provided the trust with a revolving credit facility of up to $150 million for bridging finance purposes, including the maintenance of debt covenants.
“The loss of the Lehman facility undermines the trust’s flexibility in achieving this target and makes it more vulnerable to a softening in cap rates or a slowdown in investor inflows.
“Further, due to limited access to financial information regarding the Reed Property Group during the review process, Adviser Edge was unable to issue an opinion regarding its financial condition or the extent of financial support that it could provide to the trust,” he added.
Reed Property Trust owns the Central One building in Townsville CBD; Chancellor Village Business Centre Sippy Downs, Queensland; Canberra Eye Hospital Symonston, ACT; Telstra House Dickson, ACT; APN Toowoomba print facility at Wilsonton and Yandina, QLD; a BlueScope industrial facility in Coolum, QLD; the Silver @ The Exchange office building on the Gold Coast; and the Chancellor Homemaker Centre and Chancellor Convenience Centre Sippy Downs.
The trust’s primary source of debt finance is a facility with National Australia Bank. As at August 2008, the trust had a loan valuation ratio of 69%, however, the debt covenant requires the trust to reduce its LVR to 65%.
Australian Property Journal
