IStar Financial Inc., the commercial real-estate lender seeking to avert a bankruptcy filing next year, according to an article today by Jeffrey McCracken and Jonathan Keehner at therealdeal.com, "is in talks with creditors about exchanging debt and lining up as much as $2 billion in new financing, three people with direct knowledge of the matter said."
"Franklin Resources Inc., IStar's largest bondholder, is leading one of the groups offering financing, said the people, who asked not to be identified because the discussions are private. The company is also in talks with Centerbridge Capital Partners LLC as well as other lenders, including its banks, about potential financing, according to the people," the article continued.
"IStar, which has funded properties including the Trump SoHo hotel-condominium building in lower Manhattan, may refinance its loans with a new $1 billion to $2 billion credit line as an alternative to seeking bankruptcy protection, the people said. IStar, which is being advised by Lazard, had about $2.8 billion of non-performing loans as of Sept. 30 and reported that its third-quarter net loss narrowed to $75.5 million from $248 million a year earlier," according to the article.
The article said that Michael Kim, an analyst at CRT Capital Group in Stamford, Connecticut, said that "The fundamentals of IStar's business appear to have improved, potentially making third-party or lender financing a more viable solution," adding that "Clearly there is more work to be done given the level of troubled assets in the portfolio, but the strength in the credit markets may allow the company to find a workable refinancing."
Andrew Backman, a spokesman for New York-based IStar, declined to comment.
Loomis Sayles & Co., another IStar bondholder, and H/2 Capital Partners, the investment firm run by former IStar executive Spencer Haber, are working with Franklin on the potential debt exchange and financing, according to the people who said that IStar is looking to exchange existing debt for new securities with a longer maturity.
Hedge Funds Representatives from Loomis Sayles, H/2, Franklin, Centerbridge and Milbank weren't immediately available to comment.
"Franklin Resources Inc., IStar's largest bondholder, is leading one of the groups offering financing, said the people, who asked not to be identified because the discussions are private. The company is also in talks with Centerbridge Capital Partners LLC as well as other lenders, including its banks, about potential financing, according to the people," the article continued.
"IStar, which has funded properties including the Trump SoHo hotel-condominium building in lower Manhattan, may refinance its loans with a new $1 billion to $2 billion credit line as an alternative to seeking bankruptcy protection, the people said. IStar, which is being advised by Lazard, had about $2.8 billion of non-performing loans as of Sept. 30 and reported that its third-quarter net loss narrowed to $75.5 million from $248 million a year earlier," according to the article.
The article said that Michael Kim, an analyst at CRT Capital Group in Stamford, Connecticut, said that "The fundamentals of IStar's business appear to have improved, potentially making third-party or lender financing a more viable solution," adding that "Clearly there is more work to be done given the level of troubled assets in the portfolio, but the strength in the credit markets may allow the company to find a workable refinancing."
Andrew Backman, a spokesman for New York-based IStar, declined to comment.
Loomis Sayles & Co., another IStar bondholder, and H/2 Capital Partners, the investment firm run by former IStar executive Spencer Haber, are working with Franklin on the potential debt exchange and financing, according to the people who said that IStar is looking to exchange existing debt for new securities with a longer maturity.
Hedge Funds Representatives from Loomis Sayles, H/2, Franklin, Centerbridge and Milbank weren't immediately available to comment.
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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