Henderson has sold its 184m pound Caspar Property Fund to repay about 167m pounds of commercial mortgage-backed securities (CMBS).
The sale of the 24 remaining buildings in the fund was to a joint venture between Mountgrange Investment Management and Patron Capital. Sixty per cent of the assets are in London and the south east and the remaining across the UK.
Henderson had gone past its 'Loan Maturity date' and had they not secured this sale would have been at the mercy of their creditors.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
The Caspar fund bought 64 properties in 2004 and financed the transaction with CMBS. The bonds and mezzanine loans totalled about £600m pounds, more than 80% of the estimated value of the properties at the time of the bond sale, according to the 2004 securitized-loan prospectus.
With the property slump Henderson's fund breached its loan-to-covenant ratio, going as high as 109% loan-to-value (LTV), and has been making disposals to pay off the debt.
Commenting on the deal Martin Payne, the Fund's manager, said: "Strategic disposals earlier in the Fund's life coupled with the completion of an extensive programme of asset management business plans maximised investment value and returns to the unit holders.
"It has been a tense and challenging process between managing the debt expiry at the same time as trying to conclude a very complex disposal transaction. We are delighted to have concluded a satisfactory outcome, which means we are able to return equity to investors from a Fund whose LTV had gone well above 100%. The key to that is in identifying the right purchasers and working together to find solutions."
American Express introduces 'Plan It' payment instalment option
News Amex users can now split parts of their credit bill into further instalments. Is it worth it?
By Marc Shoffman Published
Three fund ideas for your stocks and shares ISA
If you have yet to maximise this year’s £20,000 ISA allowance, here are some funds worth considering.
By Katie Williams Published