Fordgate, the private property company of UK businessmen Moises and Mendi Gertner, is in loan restructuring negotiations with its lenders after defaulting on interest payments for a EUR 700 mln securitised senior loan.

In a statement to the Irish stock exchange, Morgan Stanley Mortgage Servicing said the borrowers had failed to make sufficient payments to meet 'all of their obligations in respect of interest due on the whole loan'. The latest interest payment was due on 7 November.

As a result, the parties are holding talks 'with a view to reaching an agreement whereby this and other default events may be remedied'.

Morgan Stanley originally provided the EUR 695 mln seven-year senior loan in May 2007 to partially fund the acquisition of 53 properties in Continental Europe and the refinancing of 12 other assets, with a combined value of EUR 1.2 bn. The debt was securitised under the Xuthus CMBS facility. A partly amortised EUR 354 mln junior portion was also granted.

The CMBS facility is backed by a portfolio consisting of 65 multi-tenanted assets in the Netherlands, Belgium, Germany and Switzerland. It provides 571,000 m2 of space generating rent of nearly EUR 75 mln a year. The main tenants comprise European payment processing company Equens (8.7%) and the Dutch government property agency Rijksgebouwendienst (6.3%).

The largest schemes are an office building at Winthontlaan 1 in the Dutch city of Utrecht offering 35,000 m2 as well as the TT Centre in the Belgian city of Hasselt.