Noteholders negotiate as Irish Opera loan defaults

The €375m loan securing a Dublin office and retail portfolio formerly owned by Treasury Holdings subsidiary Castle Market Holdings has gone into default.

The Opera Finance (CMH) CMBS loan failed to repay on January 18 and restructuring talks are under way between the €85m junior loan’s new owner, Northwood Investors, special servicer Eurohypo (Hypothekenbank Frankfurt) and noteholders.

Northwood bought the junior debt from NAMA at a discount of more than 90% in December and has appointed Brookland Partners as its financial adviser.

One analyst said the private equity firm has effectively bought itself “a seat at the table” for negotiations, which is likely to involve a managed disposal of the 16 assets in a recovering market. The largest is the 145,000 sq ft Stillorgan shopping centre.

Certain activist and opportunistic class A note investors look to be pushing for enforcement and a quick sale, despite the fact that this would produce significant losses in a recovering market for many of the other classes of notes.

The class Ds – the controlling class with the ability to replace the special servicer – have appointed Paul Hastings as legal adviser to interact with Eurohypo.

Eurohypo financed the portfolio with a €425m loan, then securitised, in 2005. Anglo Irish provided the junior debt before it was transferred to NAMA.

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