Wharf landlord Songbird reveals losses
Canary Wharf Group's parent company Songbird has posted a £1.82billion pre-tax loss for the year.
The estate landlord - which has been hit by falling property prices in recent months - warned there is a material risk of breaching financial covenants over the next 12 months.
In an announcement today, Songbird revealed it has appointed investment bank Rothschild to look into the refinancing of a £880million loan due in May 2010.
The market value of its property portfolio fell from £6.76million to £4.93million, a year-on-year drop of 26.5 per cent. In a turbulent year for the Wharf, Lehman Brothers' 25 Bank Street headquarters was taken on by Japanese bank Nomura after the Wall Street giant sank into administration in September. But Songbird also announced that JP Morgan had agreed to base its European headquarters in the upcoming Riverside South development, at an initial cost of £237million.
AIG has also posted £500million in collateral to cover possible rental defaults at 25 Bank Street and Citigroup's Canada Square HQ. The international insurer was contractually required to take this step - which protects the estate landlord for the next four years - when it found itself in huge financial difficulties in September, necessitating a US Government bailout.
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