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Europes Largest Office Complex, The Giant Squid And Lehman

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PARIS — France’s highest court ruled Tuesday that the owners of Coeur Défense, the largest office complex in Europe, could remain under court-appointed creditor protection while they restructure their debts.


Coeur Défense is in La Défense, a business district west of Paris. The biggest complex of its kind in Europe, it consists of two 40-story towers and three low-rise buildings and was completed in 2001.

Current tenants include HSBC, which renewed its contract in 2010, and AXA Investment Managers.

In 2007, Lehman Brothers and a French partner, Atemi, bought the property from the French real estate investment trust Unibail and Goldman Sachs’s Whitehall Funds for €2.1 billion, about $2.9 billion. At the time the deal was heralded as the largest single asset transaction in Europe. Lehman bought the property through H.O.L.D., with the shares in turn owned by two Lehman entities and GE’s pension fund, through a holding called Dame Luxembourg.

The deal was facilitated by a loan for €1.6 billion from Lehman’s German unit, which was subsequently acquired by Windermere XII, a structured finance vehicle of a type known in France as a fonds commun de titrisation, or F.C.T. That vehicle is in turn managed by EuroTitrisation, a structure owned by French lenders, including Crédit Foncier, Crédit Agricole, Natexis Banques Populaires and BNP.

EuroTitrisation financed its exposure through the issuance of notes, which were listed in Dublin. H.O.L.D. put up the rent owed by tenants as security on the loan and hedged for fluctuations in interest rates on the loan via contracts with Lehman Brothers units in the United States and Britain.

When Lehman Brothers collapsed in September 2008, the two Lehman units lost their eligibility to act as counterparties to the hedging transaction after their credit ratings plummeted. The F.C.T. subsequently requested that H.O.L.D. provide new guarantees on the €1.6 billion loan within 20 days or face accelerated reimbursement.

H.O.L.D. went to court seeking a safeguard under a 2004 French law that grants creditor protection similar to that provided by Chapter 11 of U.S. bankruptcy law. One of the few occasions when the law had previously been tested was in 2006, when the debts of Eurotunnel, which operates the tunnel linking Britain and France, was given court protection to restructure in 2006. France subsequently updated its bankruptcy provisions seeking to strengthen protections for vulnerable companies.

Sounds like a very tangled web! Or it was so complex because the maths never really added up.

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  • 311 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%

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