Barclays to offload debt on ‘underwater’ Dublin asset

Barclays Capital is trying to offload the debt it provided against a Dublin office asset called La Touche House, which is now worth less than the value of the loan.  While the bank does not own the asset, the loan is in breach of its loan-to-value covenant.

“The asset isn’t in receivership but is so deeply underwater that if you were to collapse the loan, whoever bought the debt would end up owning the asset,” said one property agent. Barclays Capital has been trying to place the debt for a long time, the agent added.

Given that the loan is performing on an income coverage basis, the bank is under no real pressure to sell. “What we’ve been seeing is where strong cash flows come out of a building, banks tend to move very slowly,” he said.

La Touche House, multi-let primarily to financial services companies, was bought by a consortium of 62 Irish investors for €82.5m in 2002. BarCap has received multiple bids, including one involving the purchase of the property in a three-way deal with the lender, the current owners and the buyer. But it has not agreed a deal as it could not hit its price target.