Centerline Holding Enters Into An Agreement With Farkas (C, BAC, MS)
Centerline Holding Co. has signed a deal with prominent real-estate investor Andrew Farkas. Under the terms of the deal, Farkas will inject $100 million in new equity in the company. He will also assume $180 million worth of Centerline’s debt. Centerline Holdings is one of the biggest commercial mortgage servicing specialists in the United States.
The deal has been met with skepticism by Centerline Holding’s bondholders. Farkas has, however, trashed any such concerns. He said that the idea that he wouldn’t serve the interest of bondholders is ‘preposterous’. Farkas, through his company Island Capital Group, now has the full ownership of the servicing and debt fund management units of Centerline. He also has 40% stake in other business units of Centerline. The remaining stake belongs to Centerline shareholders and creditors. Centerline’s major creditors are Citigroup Inc. (NYCE:C), Bank of America (NYSE: BAC) and Morgan Stanley (NYSE: MS)
