firesales,mezzanine lending,gfc perspectives, page-3

Hi Duped,
I read it that the project owed 400m to Credit Suisse as first mortage and then a further 240m in mezz d plus 70m equity. 400 + 240 + 70= 710m
Sounds like 368m had been paid off the 400 from CS via the sale of 40% of the units and Fortress paid the 38m still owing.? The remaining 60% of units might have sold for about 500m but some not completed/renovated/converted?
As you point out Duped many unknown details of the asset etc.
So only the mezzanine lenders left as creditors when
"the borrower defaulted on the debt when it came due."
Fortress had first bought "at a Discount"
"The private-equity firm first bought at a discount the $70 million controlling senior slice of the so-called mezzanine debt. Duped that messes up your figures, doesnt it?

So for 70m they got something discounted/cheaper or higher interest? plus they paid the 32m defaulted CS loan, [that default had to occur for the firesale to occur?]...plus they paid 20m at a liquidators auction..= 128m for something that is reported
"The project was orginally valued at $640 million. "
However it is complcated because"Fortress paid less than $100 million for the remaining unsold units in the condo conversion project in Midtown"...perhaps the 32m should be subtracted from the 70m?..
Anyway it was a vulture swoop,imo.and fund investors should try to hold onto their assets,imo.and be patient with REs.

Meanwhile the funds type investors that I compare to OPI and PIF and others here in OZ get left with very little or nothing.Is that right?

How can you protect jobs in an industry and the value of local assets and the savings of fund investors when a system of strategic lending could rorte firesales? and the loss is all blamed on the borrower?

I for one, applaude the reporters of article no 2..






Is that how it goes?