News
IT'S REALLY TWISTED
August 11, 2011
| Think Rubik's cubes are tough? Try the twists and turns in restructuring distressed syndicated loans and multi-tranche deals, aka the workout. |
 |
| They’ve gotten more complicated because of the different parties that hold an interest in a financing at any given time, says Katten Muchin Rosenman partner Tim Little, who’ll be moderating our Distressed Phase II: Secondary Loan Market event and schmooze at the Harvard Club on Aug. 18. US banks, foreign banks, hedge funds, and RE investment funds all have different regulatory regimes and biz agendas and every syndicated loan has actions that need majority (sometimes unanimous) consent, like extending maturities. Achieving the necessary consensus takes as much creativity and people management as it does legal skill or knowledge of the underlying property, he tells us. (Too many cooks, one busy broth.) |
 |
| But good news: buyers and sellers are getting on the same page and distressed debt is moving at discounts that don’t represent surrender by the current holder, Tim says. Instead, the buyer can make an attractive return if the borrower repays the loan. If it doesn’t?Take over the asset. Over the past few years, many traditionally equity investors have bought nothing but debt—they’re not seeing opportunities on the equity side that can produce necessary returns. Although greater distressed debt trades have made workouts more complicated, they’re getting done and foreclosed properties are getting managed. What’s needed: frequent communication and building consensus on economics so a proposal can be structured. |
 |
| But have no fear, your distress navigators are here. Bisnow’s gathered some of the best and brightest panelists for our event: Square Mile Capital’s Craig Solomon, LoanCore Capital’s Mark Finerman, Rialto’s William Landis III, Dune Real Estate Partners’David Oliner, Eastdil’s Nicholas Seidenberg, and FTI Consulting’s Glenn Brill. Plus, get a special economic outlook from Reis economist extraordinaire Victor Calanog. Spots are very limited, soregister now! |
