€373m loan unpaid as property values fall

A €373m interest-only loan backing an Irish commercial mortgage bond failed to repay at maturity after the underlying properties halved in value.

The loan matured on Jan 15, and a three-day grace period ended without repayment, a statement from Hypothekenbank Frankfurt, a unit of Commerzbank, revealed.

Commercial mortgage- backed security (CMBS) pool cash flows from loans to offices, shopping centres, and industrial units, and package the payments into notes sold to investors.