Simon Halabi has failed to remedy the loan-to-value covenant breach on his Protractor portfolio of London office buildings.
The Syrian-born entrepreneur had been given a deadline of today to cure the breach but, as expected, failed to do so.
The White Tower 2006-3 commercial mortgage-backed securities (CMBS) vehicle, whose bonds are secured on the portfolio, said this morning that as a result a ‘loan event of default’ had occurred.
The whole loan has become a ‘specially serviced loan and Hatfield Philips has been appointed special servicer.
The latest valuation of the portfolio of nine buildings, was £929m, which is below the £1.15bn of outstanding bonds, equates to a loan-to-value ratio of 124%.
A sale of the assets is expected to follow, which should enable the class A and B bondholders, who together hold £850m of bonds, to be repaid.