Eurohypo agrees Uni-Invest work-out

A work-out plan has been signed to try to sell property and pay off the largest European CMBS to mature in early 2010. Eurohypo, servicer to the €766m Opera Finance (Uni- Invest) loan, secured on 242 Dutch properties, has worked out a standstill agreement and business plan with the borrower and mezzanine lenders. The loan matured on 10 February and was impossible to refinance due to its size and the fall in the portfolio’s value. It has now gone into special servicing.

The deal avoids foreclosure and forced sale of the secondary and tertiary properties, which have an average lease length of just 3.7 years. Eurohypo said: “The purpose of the agreement is to provide a stable basis for the borrower to operate normally for up to two years (subject to ongoing tests), while working towards an orderly financing.”

The tests will track whether the borrower is working towards a successful refinancing and to maximise the value of principal recoveries in the two years before the notes mature. Eurohypo plans to appoint two experienced Dutch property figures to work with the borrower.

Uni-Invest Group was taken private by Lehman Brothers Private Equity Real Estate in 2003 and its portfolio refinanced with HVB. It was refinanced a second time through the Opera securitisation in 2005. Eurohypo is working with REPE Capital Partners, which bought Lehman Brothers’ real estate private equity business last year and advises the equity-owning syndicate.

The first step has been taken by paying down €49.14m of the senior loan with funds released by the mezzanine agent and from property disposals, reducing it to €716.56m and cutting the loan-to-value ratio on the whole loan to 90.7%. This is the second large securitisation restructuring that Eurohypo has managed to agree. Last month it agreed to restructure Opera Germany 2, secured on four German shopping malls, reducing the outstanding loan to €608m.