AIB is tight-lipped on possible billion-dollar losses in the US
The Irish Independent reports: ALLIED Irish Banks declined to say yesterday how much it stands to lose on two loans in the US where borrowers ran into problems this week. One loan helped finance the $5.4bn (€3.7bn) acquisition of the biggest apartment block in New York, while the other loan helped finance a fourth-generation chain of 13 daily newspapers and 60 weekly newspapers and magazines.
AIB is one of three banks which lent $1.5bn to one of America's biggest property developers to buy a historic 80-acre apartment complex. AIB and the other two banks have now sent a formal letter to developers Tishman Speyer and BlackRock warning that failing to pay could lead the debtholders to launch a foreclosure action and possible seizure of the original $3bn mortgage the two firms took against the property.
AIB's wrote to the developer after Tishman Speyer and BlackRock missed a $16.1m payment due last Friday. A foreclosure would be the second-largest default of a US commercial mortgage-backed security and leave AIB part-owning Manhattan's largest residential enclave which is home to around 25,000 people.
Evict
Tishman Speyer and BlackRock bought the 11,200-unit property in 2006 with plans to raise rents, evict illegal occupants and build a gym and new gardens.
Problems came to a head last October when New York's highest court ruled the developers could not raise rents despite the improvements.
Tishman Speyer has invested tens of billions of dollars on property around the US and has been the biggest US commercial real estate buyer after venture capital group Blackstone since 2001, according to the New York research firm Real Capital Analytics.
Standard & Poor's last month withdrew its credit rating on a group of Washington-area properties with debt payments that Tishman and its partners have been trying to restructure.
AIB also declined to say yesterday how much it stands to lose after a US-based chain of 13 daily newspapers and 60 weekly newspapers and magazines, the Augusta-based Morris Publishing, filed for bankruptcy protection after agreeing a plan with creditors to plan to slash the publisher's $415m debt by more than two thirds.
View the full article on The Irish Independent: AIB is tight-lipped on possible billion-dollar losses in the US
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