Henderson Global Investors is seeking bond holders’ consent to increase asset sales from the Henderson Caspar Property Fund, to take advantage of rising prices in the market.
The senior debt of the UK closed-ended, balanced fund was securitised in 2004 and under the conditions of the CMBS, only 13% of the fund’s properties by value can be sold in one year.
The CMBS issuer, EPIC (Caspar), has called a note holders’ meeting for 29 January, after an attempt to hold a meeting on 14 January was inquorate.
Andrew Creighton, Caspar’s fund manager, said: “The purpose for the extraordinary resolutions is to increase our flexibility to enable us to react quickly to market conditions. “We are restricted on the percentage of sales we can undertake each year and are already up against this limit, preventing us from doing anything more until this October.
“It makes no sense for any holder of notes, mezzanine or units to prevent the sale of assets, which could perhaps have a negative impact on the interest cover ratio or cause the loan-to-value ratio to increase.”
The fund’s properties were valued at £445m in December 2009. After the January 2010 interest payment and the repayment of more debt following a couple of property sales, the outstanding loans will total £380m, about £34m of which is mezzanine debt.
Creighton said: “The LTV is still high, but it is heading in the right direction.” Henderson is also asking note holders to waive the 75% loan-to-value undertaking in the Caspar fund.
The fund manager tried to push through the same changes last year, but note holders voted down the LTV relaxation. Creighton said Henderson had “no intention of running for the door early”.
He added: “Our forecasts suggest that performance will improve right through to the end of the fund’s life, in 2012. Perhaps there is an argument for extending the vehicle beyond that date to capture more of the recovery, which we believe will be producing strong returns through to 2014.”