"Money managers who bought a $705 million commercial-mortgage bond tied to Manhattan's Worldwide Plaza building are at risk of substantial losses after the property's appraisal was slashed amid the departure of key tenants. The 49-story skyscraper at 825 8th Ave. was recently reassessed at $345 million, according to loan documents, less than a fifth of its original $1.74 billion value when the debt was issued in 2017."
"That's left holders of the once-AAA portion of the bond on track for losses of about $53 million, or 20%, should the property be sold, based on a key industry metric known as an appraisal reduction amount. Holders of $435 million of lower ranking debt are likely to be wiped out."
Worldwide Plaza, a 49-story skyscraper at 825 8th Ave. in Manhattan, had its appraisal cut to $345 million after key tenants departed. The building’s valuation previously stood at $1.74 billion when the debt was issued in 2017. Money managers who purchased a $705 million commercial-mortgage bond tied to the property face substantial losses. Holders of the once-AAA portion of the bond are on track for about $53 million in losses, roughly 20%, based on the appraisal reduction amount if the property is sold. Holders of $435 million of subordinate debt are likely to be wiped out.
Read at www.bloomberg.com
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