Presentation - Titan Europe 2006-1 Noteholder ... - Hatfield Philips

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Presentation - Titan Europe 2006-1 Noteholder ... - Hatfield Philips

Titan 2006-1 Loan Reviews


HATFIELD PHILIPS INTERNATIONAL

TITAN 2006-1 DEAL SUMMARY

Asset Profile

Current # Property

Transfer

Loan Balance (€) Properties Location Type Maturity Loan Status Date Workout Strategy

Mangusta Portfolio 85,064,200 7 Germany Various Jul-2012 In Special Jun-2008 Insolvency

Nuremberg Retail Distribution Centre 18,779,051 1 Germany Retail Distribution/Office Oct-2012 In Special Oct-2012 DPO

KQ Warehouse Portfolio 77,467,258 N/A Germany N/A Jan-2011 In Special Sep-2009 Insolvency

Tiden Portfolio 84,810,395 7 Germany Mixed-Use/Office Jan-2013 In Special Jan-2013 Insolvency

Total 266,120,904 15

Value

Valuation

Loan (€ millions) Date LTV Occupancy

Mangusta Portfolio 11,790,000 Aug-2009 950.4% 99.4%

Nuremberg Retail Distribution Centre* 26,750,000 Sep-2005 70.2% 100.0%

KQ Warehouse Portfolio N/A N/A N/A 100.0%

Tiden Portfolio 42,370,000 Jun-2012 200.2% 68.1%

Total 80,910,000

*A new valuation was received but not disclosed due to on-going negotiation

All figures recorded are as of the April 2013 IPD

HPI │ TITAN 2006-1 PORTFOLIO OVERVIEW


HATFIELD PHILIPS INTERNATIONAL

Loan Stats

MANGUSTA PORTFOLIO

Workout History

Pending Asset Disposal

UPB at Origination € 158,865,538

Current UPB € 85,064,199

Initial LTV 86%

Current LTV 950%

Special Servicing Transfer Date 23 June 2008

Asset Stats

Lettable area

5,556 sqm

No. of assets 7

Asset type

Various, mainly restaurants

Valuation/Date € 11,790,000*/ 31 Aug 2009

Location

Germany

GRI (2010) € 917,170

ERV(2010) € 854,757

Vacancy (2010) 0.62%

WALL

Not reported

Transferred to Special Servicing on 23 June 2008

Acceleration of the loan 17 December 2009

Opening of insolvency proceedings in May 2010

upon application of the lenders

Sale of the properties on 25 August 2010;

purchase price € 76,468,820


Proceeds of € 67,241,819 from the sale of the

Mangusta Wuppertal Properties, Mangusta Berlin

Property, Mangusta Sigmaringen Property and the

Mangusta NH Hotel Property were received in

two tranches on 28 June 2011 and on 29 June

2011

Closing of the SPA in relation to the remaining 7

assets in Heidelberg & Sandhausen depends on

the outcome of Legal Proceedings


Proceeds of € 9,227,000 to be received for

remaining 7 assets





Closing of the sale of the remaining properties did

not take place because the borrower is not yet

registered as owner in the land register. This is due

to a corporate restructuring initiated by the

sponsor some weeks prior to the opening of the

insolvency proceedings

The insolvency administrator applied for the

correction of the land register. This was denied by

the land registry because the insolvency

administrator failed to provide evidence in the

required format of a public deed that the borrower

is in fact the owner of the properties. The denial

was finally confirmed by the court

Therefore, the insolvency administrator,

supported by the Issuer (costs estimated max.

€ 25,000 for the Issuer), sued the sponsor claiming

that the borrower has indeed title to the

properties. This litigation is pending. If appealed

this can last for up to approx. 2 further years

Until decided the SPAs cannot be closed

Strategy


Follow up on legal proceedings regarding asset disposal

* Only related to the remaining 7 assets of the portfolio

HPI │ TITAN 2006-1 LOAN REVIEWS

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HATFIELD PHILIPS INTERNATIONAL

Loan Stats

Strategy








Transferred to Special Servicing on 22 October

2012 due to non repayment at the maturity

The Special Servicer has undertaken further

analysis in respect of strategy and values

At the end of April 2013, the Special Servicer and

the sponsor agreed to a term sheet for a DPO in

an aggregate amount of € 14.65m (as final

redemption of the loan) in the format of an asset

sale. For the period of the DPO a standstill was

agreed

Non-refundable deposit of € 1m to be paid at

signing of the SPA (estimated for second quarter

2013)

It is estimated that the DPO will close prior to the

October IPD, with an extension option for 3

months against payment of a further nonrefundable

deposit of € 1m





The loan matured in October 2012 and could not

be repaid

There is a cash trap in place and since maturity of

the loan all funds on the borrowers account have

been used for interest payment and repayment

The property is occupied by a single tenant with a

remaining lease term of 7.75 years

According to undisclosed latest valuation the

over-rent situation has increased considerably

Monitor the execution and that the agreed milestones, inter alia, proof of financing, progress with legal documentation and payment of deposits, are met. Draft

financing term sheet, draft SPA and first tranche of non-refundable deposit have already been received

If milestones as agreed in the term sheet should not be met the standstill can be terminated and full payment of the outstanding loan amount demanded

Closing is expected to take place in the second half of 2013


UPB at Origination € 21,663,750

Current UPB € 18,779,050

Initial LTV 81%

Current LTV* 70%

Special Servicing Transfer Date 22 Oct. 2012

Asset Stats

Lettable area

27,685 sqm

No. of assets 1

Asset type

Retail Distribution /Office

Valuation/Date* € 26,750,000/ 9 Sept 2005

Location

Nuremberg, Germany

GRI € 2,145,900

ERV (orig.) € 1,711,000

Vacancy 0 %

WALL

NUREMBERG RETAIL DISTRIBUTION CENTRE

7.75 years

Workout History

Performance/Credit Events

Until completion of the DPO, the lenders, acting through the Special Servicer, remain entitled to receive any income for the Nuremberg Retail Distribution Centre

Property

* A new valuation was received but not disclosed due to ongoing negotiations

HPI │ TITAN 2006-1 LOAN REVIEWS

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HATFIELD PHILIPS INTERNATIONAL

Loan Stats

KQ WAREHOUSE PORTFOLIO

Workout History

Performance/Credit Events

UPB at cut-off € 97,928,541

Current UPB € 77,467,258

Initial LTV 67%

Current LTV

N/A

Special Servicing Transfer Date 27 Nov 2009

Asset Stats



Transferred to Special Servicing 27 November

2009 due to tenant insolvency and lease

termination in Leipzig

New direct lease was concluded with G5

subtenant. Properties were sold in pieces for total

disposal proceeds above valuation. A settlement

for G4 unpaid rent during insolvency was

achieved



The loan matured on 18 January 2011 and was

extended to July 2012 in return for perfecting

bank account pledges. A new asset management

agreement and subordination agreement to keep

the borrowers solvent was agreed

G5 tenant continued to pay rent until property

was sold; G4 paid no rent after Special Servicing

Transfer event

Lettable area

No. of assets

Asset type

Valuation/Date

Location

GRI

ERV(orig)

Vacancy

WALL

None

None

N/A

N/A

N/A

N/A

N/A

N/A

N/A

G5 was put into voluntary liquidation in July 2012.

All available proceeds have now been received. G4

was put into insolvency in July 2012


€ 1.4m cash remains in G4 bank accounts.

Contingent liability exists if G4 were ever joined in

lawsuit by City of Leipzig if insolvency

administrator of former tenant sued for ground

tax refund




Gross disposal proceeds total € 27.125m, vs. Postdefault

valuation of € 26.713m. Net Disposal

Proceeds total € 24.222m

Disposal proceeds were used inter alia to repay

drawings on liquidity facility for unpaid interest

(no rent from G4 post-default)

In addition, cash disbursements of € 1.4m have

been received post-insolvency of borrowers from

cash reserve accounts (including G4 insolvency

rent settlement), with up to € 1.4m still disbursable

Strategy

Press insolvency administrator of the G4 borrower to disburse remaining funds on borrower account to Titan Europe 2006-1


Final Recovery Determination after receipt of residual G4 funds

HPI │ TITAN 2006-1 LOAN REVIEWS

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HATFIELD PHILIPS INTERNATIONAL

Loan Stats

TIDEN PORTFOLIO

Workout History

Performance/Credit Events

UPB at Origination € 98,000,000

Current UPB € 84,810,395


Transferred to Special Servicing on 23 January

2013 due to non-payment at maturity


The loan has recently gone into insolvency

following loan maturity on 18 January 2013

Initial LTV 87%

Current LTV 200%

Special Servicing Transfer Date 23 Jan 2013

Asset Stats

Lettable area

55,095 sqm

No. of assets 7

Asset type

Mixed-Use / Office

Valuation/Date € 42,370,000/ 30 Jun 2012

Location

Germany


Negotiations about a consensual sale failed and

preliminary insolvency proceedings were opened

on 23/24 April 2013




All debt service payments have been made until

maturity

Following the filing for insolvency the borrower’s

in-house Asset Manager stopped working

The largest tenant representing 49.07 % of the

rental income has a remaining term of 0.18 years.

Reletting will be very challenging. The second

largest tenant representing 28.6% of the rental

income moved in recently (2012) and has a

remaining term of approx. 9 years

GRI € 4,882,384

ERV(current) € 5,380,064

Vacancy 31.86 %

WALL

3.71 years

Strategy




Negotiate and agree a realisation agreement with the insolvency administrator

Quickly establish a working asset management of the borrower with the insolvency administrator

Appoint a transaction manager and sell off the assets in cooperation with the insolvency administrator

HPI │ TITAN 2006-1 LOAN REVIEWS

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