Background: Ajax was engaged by the owner of a 6-property retail portfolio with over $250 million in debt to several major banks Three of the loans were construction loans with personal guarantees and cross collateralized against other assets.
Restructuring: The portfolio, as per Ajax’s underwriting, had little to no equity value The client’s objective was to keep the company operating while retaining as many of the assets as possible Ajax negotiated two standstill agreements with the lenders. Over the next three months, Ajax negotiated individual cash flow mortgages with incentive management clauses.
Outcome: The Borrower invested limited capital, retained property management and leasing fees, and retained an equity upside in improved performance over the next 5 years. The rates and terms of the mortgages improved significantly while the bulk of the guarantees remained in place.