Finance CMBS
Ciena Capital Seeks BK Protection
Oct 1, 2008
By: Tom Dworetzky, News Editor

Allied Capital has announced that Ciena Capital L.L.C., a portfolio company of Allied Capital, has voluntarily filed for bankruptcy protection. Ciena has continued to experience significant deterioration in the value of its assets as a result of increasing uncertainty in the financial markets, decreasing bid prices and a reduction in the number of loan buyers. In addition, talk from various news reports suggests that shorting may also be playing a big part in its present troubles.Ciena "believes that by filing for bankruptcy protection it will be able to proceed with an orderly sale of its assets over time in more favorable market conditions in the future and thereby maximize the value of its assets and reduce costs in order to repay its debts," it said in a statement.The firm will continue to operate its servicing business and manage its assets as a "debtor-in-possession." As a result of Ciena's decision to file for bankruptcy protection, Allied Capital's unconditional guaranty of the obligations outstanding under Ciena's revolving credit facility may become due. Allied Capital intends to pay approximately $320 million to the lenders in connection with Ciena's revolving credit facility and will continue to guarantee a remaining balance of approximately $10 million. To fund the payment, Allied Capital intends to use cash resources of approximately $150 million and may borrow approximately $170 million on its unsecured revolving line of credit. Allied Capital will become a senior secured lender to Ciena.At September 30, 2008 and after giving effect to money paid in connection with the guarantee, Allied Capital estimates that it will maintain approximately $200 million in cash and other liquid securities and will have borrowings of approximately $170 million under its line of credit. In addition, Allied Capital has approximately $124 million in standby letters of credit under its line of credit, including standby letters of credit totaling approximately $103 million in connection with term securitization transactions completed by Ciena. Allied Capital is currently in negotiations regarding the provision of a debtor-in-possession credit facility for Ciena.Allied Capita. It has approximately $5 billion in total balance sheet assets at June 30, 2008.

 
Recent CMBS Headlines
paulson A Bailout for Commercial Real Estate?
Dec. 22, 2008
"Right now, we believe there is insufficient systemic capacity to refinance expiring, performing commercial real-estate loans," reads a letter from a dozen commercial real estate trade groups to Treasury Sec. Henry Paulson, according to the Wall Street Journal this morning. In other words, the commercial side of the business, long perceived as relatively healthy compared with the residential side, is warning of dire straits ahead unless refinancing money is available in the near future.
CMBS Delinquencies Speeding Up: Fitch
Dec. 22, 2008
Back in January 2008, long before the capital markets took their astonishing twists, Fitch Ratings made a sobering prediction: By the end of the year, its CMBS loan delinquency index would be double or triple the 0.28 percent recorded at the end of 2007. Fitch’s crystal ball turned out to be right on the money. On Friday the ratings agency reported that CMBS delinquency reached 0.64 percent for November. At this pace, Fitch projects that CMBS delinquencies could hit 2 percent by the end of 2009.
ProLogis Buy Eases Debt Squeeze on European Unit
Dec. 22, 2008
Facing a looming CMBS debt maturity next summer, ProLogis European Properties is getting some much-needed breathing room from its corporate parent. In a deal valued at about 43 million euros, or $61 million, Luxemborg-based PEPR is selling ProLogis a 20 percent share of a private investment fund.
Loan-Extension Picture Could Be a Lot Worse
Dec. 17, 2008
In the first decline since July in the delinquency rate among U.S. commercial real estate loan collateralized debt obligations, that rate fell from 3.13 percent in October to 2.80 percent in November, according to the latest information from Fitch Ratings.
 
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