Major lender in Bathla development sells debts
Private credit firms are striking deals to recover their money following the $3.4 billion collapse of property giant Bathla Group, with one major lender selling most of its exposure to a Sydney apartment project.
La Trobe Financial has sold its senior loan facility connected to the Bathla Group's Marsden Park development to 360 Capital, a property investment and funds management group. The $31.2 million acquisition empowers 360 Capital with greater control over the project. Australia's private credit market is experiencing a slowdown in growth due to the fallout from the Bathla Group's collapse.
360 Capital's mortgage investment trust, the 360 Capital Mortgage REIT, previously held an $8.9 million loan against the development, which ranked behind La Trobe Financial for repayment. With this deal, entities associated with 360 Capital now control both the first and second mortgages, enhancing their influence over project completion and debt recovery.
Advisory firm Wexted has been appointed as receiver to expedite the process of obtaining occupancy certificates and settling the 36 pre-sold apartments. Lenders, such as Centuria Bass and CVS Lane, have suspended withdrawals from some funds due to concerns about their exposure to Bathla. Major private credit manager Metrics Credit Partners has also suspended withdrawals from some unlisted funds amid scrutiny over asset valuations.
The private credit sector faces a challenging future due to higher interest rates, falling property prices, and potential developer struggles to refinance debts as nervous investors seek to withdraw their funds. Morningstar expects private credit fund growth to slow substantially in the near to medium term, which could make it harder for developers to secure financing and exacerbate Australia's housing shortage.
Written by urgent.news from ABC News AU's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
