Jump to content
House Price Crash Forum

Investors Find Gherkin Problems Difficult To Swallow


Recommended Posts

Mr Bombosch added that investors were unhappy because although the Gherkin – designed by Lord Foster – was almost fully let and was "getting all the rent it should", its value had declined because of the downturn in the London market. In February 2009, it was valued at £470m which led to a breach of the 67 per cent loan-to-value covenant on the senior debt.

"This devaluation and the loan-to-value covenant clause in the contract meant the banks could ask for more security. This meant the Euroselect 14 fund's dividend was suspended to preserve liquidity," he said. "Some investors do not understand why the banks can ask for more security.

http://www.independent.co.uk/news/business/news/investors-in-legal-row-over-gherkin-advice-2133445.html

Link to post
Share on other sites

Mr Bombosch added that investors were unhappy because although the Gherkin – designed by Lord Foster – was almost fully let and was "getting all the rent it should", its value had declined because of the downturn in the London market. In February 2009, it was valued at £470m which led to a breach of the 67 per cent loan-to-value covenant on the senior debt.

"This devaluation and the loan-to-value covenant clause in the contract meant the banks could ask for more security. This meant the Euroselect 14 fund's dividend was suspended to preserve liquidity," he said. "Some investors do not understand why the banks can ask for more security.

http://www.independent.co.uk/news/business/news/investors-in-legal-row-over-gherkin-advice-2133445.html

its kind of shocking the extreme level of investor complacency that has been fostered by the last 30 years of exponential credit expansion, these fckers are all going to have to go down before this bear market is over, there is simply no concept of risk and it highlights the fragility of the complete system to asset prices and highlights exactly why govts will do everything to stop it which naturally means a bigger and bigger implosion as more and more is malinvested into it

Edited by Tamara De Lempicka
Link to post
Share on other sites

Looks like the banks could call in another debt on a relatively successful business

thats the problem, all these businesses loaded up with unsustainable debt (what could possibly go wrong), meanwhile someone on the other side has walked off into the sunset with that payment, in this case Swiss Re and associated banking parties taking their cut on the transaction

Edited by Tamara De Lempicka
Link to post
Share on other sites

its kind of shocking the extreme level of investor complacency that has been fostered by the last 30 years of exponential credit expansion, these fckers are all going to have to go down before this bear market is over, there is simply no concept of risk and it highlights the fragility of the complete system to asset prices and highlights exactly why govts will do everything to stop it which naturally means a bigger and bigger implosion as more and more is malinvested into it

Right, these are presumably well advised investors with not insignificant amounts to invest.

I'd rather be out than in.

Link to post
Share on other sites

its kind of shocking the extreme level of investor complacency that has been fostered by the last 30 years of exponential credit expansion, these fckers are all going to have to go down before this bear market is over, there is simply no concept of risk and it highlights the fragility of the complete system to asset prices and highlights exactly why govts will do everything to stop it which naturally means a bigger and bigger implosion as more and more is malinvested into it

The best way to view this IME is with an evolutionary perspective. The biggest players are those that learned to be most adapted to this distorted easy credit environment: they don't know anything else. It's going to take a whole new generation of investors to get back to some stability and fair pricing; in the meantime opportunities for those people with a memory and some historical perspective should be abundant.

Edited by _w_
Link to post
Share on other sites

its kind of shocking the extreme level of investor complacency that has been fostered by the last 30 years of exponential credit expansion, these fckers are all going to have to go down before this bear market is over, there is simply no concept of risk and it highlights the fragility of the complete system to asset prices and highlights exactly why govts will do everything to stop it which naturally means a bigger and bigger implosion as more and more is malinvested into it

I think you are reading "investors" wrongly here.

I've read it twice and I think it is referring to the "man in the street" investor who has been advised by (having paid for the services of a) professional Financial Advisor who advised them to invest into the "Gherkin fund" s a good "income" investment, income which has been compromised by this need for additional security.

It is not referring to to Mega billion pound corporations who borrowed the money in the first place to build the block.

tim

Link to post
Share on other sites
I think you are reading "investors" wrongly here.

Quite.

Who's pension still has a "Commercial Real-Estate" component?

(not that the Equity or High Yield Debt or "Cash" components are any more wisely invested)

The good news is that there's a limit to the stupidity.

The bad news is that the limit is when balances hit zero...

Link to post
Share on other sites

Quite.

Who's pension still has a "Commercial Real-Estate" component?

(not that the Equity or High Yield Debt or "Cash" components are any more wisely invested)

The good news is that there's a limit to the stupidity.

The bad news is that the limit is when balances hit zero...

No that's not what I meant

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    No registered users viewing this page.

  • 419 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.