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Print articleCommercial Property Groups Taking Longer to Refinance
January, 2008 -
Commercial properties groups across Europe are being forced to wait longer to refinance their debts as lenders tighten their belts in the wake of the credit crunch, it has been reported.
According to a new report from Standard & Poor, the collapse of the US sub-prime mortgage market has made it harder for companies to replace loans at competitive rates, with prepayment rates on commercial mortgages falling to 28 per cent over the second half of 2007 in comparison to 33 per cent for the same period in 2006.
In addition, sales of commercial property-linked debt fell to around £34 billion in 2007, down from £48 billion for the previous year.
Such a slowdown illustrates "the difficulties borrowers face in finding alternative and competitive financing terms," analysts at Standard & Poor stated
"This is a situation that we believe is unlikely to change in the near future," the company added.
Just recently, New Star Asset Management Group announced that it wouldn't be following the example of a number of its peers and introducing a ban on redemptions, citing their commercial property fund's 20 per cent liquidity as a cushion against growing investor withdrawals.
According to a new report from Standard & Poor, the collapse of the US sub-prime mortgage market has made it harder for companies to replace loans at competitive rates, with prepayment rates on commercial mortgages falling to 28 per cent over the second half of 2007 in comparison to 33 per cent for the same period in 2006.
In addition, sales of commercial property-linked debt fell to around £34 billion in 2007, down from £48 billion for the previous year.
Such a slowdown illustrates "the difficulties borrowers face in finding alternative and competitive financing terms," analysts at Standard & Poor stated
"This is a situation that we believe is unlikely to change in the near future," the company added.
Just recently, New Star Asset Management Group announced that it wouldn't be following the example of a number of its peers and introducing a ban on redemptions, citing their commercial property fund's 20 per cent liquidity as a cushion against growing investor withdrawals.
