Equinox IR Print - fixed CoD - Barclays Capital

EQUINOX (ECLIPSE 2006-1) plc
Table (1) - Watch List
SERVICER REPORT
Loan ID Loan name Balance LTV Watchlist Reason
3 Redleaf Portfolio
55,300,000 133.48%
This loan contains a portfolio of five secondary centres spread across England.
The borrower completed 22 new leases during Q4 with a total annual rent of £204k, including 8 tenants who were previously holding over and
4 tenants who had exchanged. Due to an increase in both rent received and arrears paid, the actual ICR (whole loan) increased from 123% in
Q3 2009 to 140% in Q4 2009 (In accordance with the facility agreement arrears payments received from tenants are included in the actual ICR
calculation.) The projected ICR increased from 112.8% in Q3 to 118.83% in Q3 as a result of the new leases completed and arrears paid,
allowing additional rental income to be included in the projected ICR calculation. The number of vacant units decreased during Q4 from 21 to
14, giving a portfolio vacancy rate of 1.55% per sq ft compared with 2.81% per sq ft in Q3. Due to the new leases completed non-recoverable
costs decreased from £131,925 in Q3 to £99,422 in Q4. Rent arrears decreased from £244,660 to £214,287 representing 4% of the total annual
portfolio rent. All vacant units are being actively marketed.
Given the number of tenants holding over, the projected ICR remains below the cash trap covenant (120%) and the loan remains watch listed.
The Servicer continues to maintain a regular dialogue with the borrower following the CBRE revaluation and forthcoming loan maturity. The
portfolio market valuation of £41,430,000 equates to an LTV of 152.55% (whole loan). However, given that this loan does not have an LTV
covenant, no Default has occurred.
9 Avocado Court Portfolio 17,550,000 65.95%
This loan is secured by a portfolio of five office properties in Northern England and Scotland.
The Actual ICR is at 166% (167% in Q3 2009) whilst the projected ICR is at 153% (164% projected in Q3 2009). The decrease in the Projected
ICR is primarily due to the lease of tenant 3 expiring in Q4 2010. Therefore, projected rental income from the portfolio has decreased this
quarter. The non-recoverable costs of c£43,763 pa have been included in the ICR calculations. No rental arrears were reported. All vacant
units are being actively marketed.
Indications are that tenant 3 has expressed a desire to extend their lease once it expires in Q4 2010. Negotiations are ongoing on a new lease
agreement. As the fourth projected quarter ICR is below the cash trap covenant of 150% but above the default covenant of 110%, no surplus
cash is being released to the borrower this quarter.
As a prudent servicer we have also decided to watch list this loan until the ICR for each of the projected four quarters is above 150%.
Loan ID Loan name Balance LTV Delinquencies
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