Canary Wharf Group said today that it was financially covered for the collapse of Lehman Brothers.

The group, which is 60.8% owned by AIM-listed Songbird Estates, has seen its shares plummet today by 11.3% to 92p following the collapse of one of its major tenants.

But this afternoon it tried to reassure the market that its financial position was not at immediate risk.

Lehman has been paying £41.9m a year in rent for the 1.023m sq ft it leases at 25 Bank Street until July 2033.

The rent is due to rise in November from £41/sq ft to £53/sq ft, equivalent to £54.2m a year. Lehman occupies 875,000 sq ft and sublets the remaining 148,000 sq ft.

The 25 Bank Street building is included within the Canary Wharf Finance II (CWF II) securitisation structure through which £2.55bn of secured bonds have been issued.

Canary Wharf Group said the bondholders had recourse ‘only to the assets, guarantees and liquidity facility of CWF II and there is no recourse to Canary Wharf Group or its shareholders’.

The securitisation has a facility supplied by AIG, the troubled insurer, which provides for payment of rent by AIG in the event of a default by Lehman for up to four years from default.

AIG is obliged to post collateral or have the AIG commitment guaranteed by an entity with specified credit ratings.

The securitisation also has the benefit of a £300m liquidity facility provided by Lloyds Bank, under which drawings can be made in the event of a cash flow shortage.