Capmark bankruptcy imminent, says Reuters
According to a Reuters report, commercial real estate company Capmark Financial may file for chapter 11 bankruptcy imminently.
The company, which listed total debts of approximately $11.4 billion in its May regulatory filing, has long been in discussions to restructure its debt. Current negotiations, which are taking place amongst Capmark, its lenders, bond holders, and the FDIC, are considering a debt-for-equity swap as a possible restructuring route.
Reuters reports that private equity house KKR, Goldman Sachs, and Five Mile Capital, which bought the company in March 2006 for $1.5 billion in cash and over $7 billion in debt, will not receive any payments from the bankruptcy proceedings. Capmark’s creditor group largely consists of banks and hedge funds, with the leading banks being Citi and JP Morgan.
Capmark’s restructuring efforts have already involved the company entering into a $1.5 billion term loan facility on 29 May, in addition to amendments to its existing senior credit facility and bridge loan agreement. Proceeds from the new term loan were used to refinance a portion of other debts outstanding under existing obligations.
In a 2 September company statement, Capmark reported a net loss of $1.6 billion for the second quarter, and stockholders’ deficit of $1.1 billion. As of 30 June 2009, Capmark had approximately $1.3 billion in cash, and Capmark Bank had approximately $2.7 billion in cash available.
