Commercial Property News

McCarthy & Stone, the UK's largest retirement homes builder, is talks with its lenders over re-negotiating its bank debt, as its loans plunged in value this week amid the worsening housing sector.

Talks with the lenders are in the "early days," a source close to the matter told Reuters today, adding that a conversion of debt into equity -- which would give creditors ownership of the company -- was not being discussed.

McCarthy & Stone, owned by HBOS, West Coast Capital and financiers David and Simon Reuben, is struggling as house prices have lost 11% of their value in one year. The company has about £800 million of debt, according to a media report.

McCarthy & Stone's loan posted the biggest drop in the European secondary market this week, according to RLPC data, as the company's Term loan B and Term loan C lost 23% to settle at 51.5% of their face value.

Average bids on Europe's top 40 leveraged loans currently stand at 87.5% of face value, after losing 2.5% in a difficult July, the data shows.

Company officials were not immediately available for comment. The company is being advised by Rothschild, the investment bank also advising Taylor Wimpey