The Carlyle Group is in talks with 10 bondholders of a £17m securitised loan regarding an extension of the loan ahead of a looming repayment deadline in April.
The loan was used to purchase the £20m leasehold of a site at Monument in one of the City of London’s most sensitive and historic areas.
Carlyle, in a joint venture with developer Bellhouse Joseph, bought the long leasehold in 11-19 Monument Street and the freehold interest in 1-2 Pudding Lane in from Corob Holdings in 2006. It bought it with a loan secured from Lehman Brothers which then subsequently securitised the debt to around 10 separate bondholders.
The joint venture then secured planning permission in November 2007 for a dramatic Ken Shuttleworth-designed scheme which also includes land owned by the Worshipful Company of Fishmongers. It comprises a 90,000 sq ft, 10-storey office building with a crystalline structure folding around the square in which the Monument stands.
However, the development is unlikely to go ahead this year given the difficult market conditions and shortage of development finance.
It is thought Carlyle has been in talks since before Christmas to negotiate an extension of the loan - the interest on which is being serviced from rental income generated from the main tenant in the existing building - Lloyds TSB. Last week the special servicer Hatfield Phillips indicated that there could be a potential payment default on the loan when it reached maturity in mid April this year.
Lloyds TSB is paying an annual rent of around £2m on a lease whcih expires in March this year. It is thought that Lloyds is not willing to sign a new lease but will roll over its existing lease as a tenant-at-will.
GVA Chapman Swabey represented Carlyle and Bellhouse Joseph; DTZ advised Corob. All parties declined to comment.