Caisse de Depot et Placement du Quebec, Canada’s biggest pension-fund manager, may lose 285 million pounds ($462 million) on debt secured against investor Simon Halabi’s London properties after their value fell about 50 percent, according to two people familiar with the situation.
Caisse de Depot holds the junior portion of a 1.45 billion- pound loan secured against Halabi’s nine office properties, said the people, who declined to be identified because the information isn’t public. The senior portion of the loan, 1.15 billion pounds, was packaged into commercial mortgage-backed securities in 2006. Holders of the bonds, which are in default, rank first when the debt is repaid. Interest payments to the junior lender have already stopped.
U.K. commercial property values have slumped 44 percent since their mid-2007 peak, according to Investment Property Databank Ltd. About 230 billion pounds of loans are outstanding against U.K. commercial properties, according to research from Leicester-based De Montfort University.
Read Chris Bourke’s full article “Quebec’s Caisse Said to Risk Losing $462 Million on Halabi Loan” in Bloomberg (August 26, 2009).