Fitch Ratings estimates there remained six months of interest reserves to pay interest on the loans for Stuyvesant Town and Peter Cooper Village on Manhattan’s East Side, in a statement released today.
After reviewing the 11,227-unit development’s 2009 budget and rent roll from the end of 2008, the bond analyst firm said the income from the development was not sufficient to pay the debt service. The debt service reserve has fallen from $400 million to $127.7 million, as of January 15, and the general reserve balance had been wiped out, the report said. Fitch did not expect cash flow to improve in 2009.
Trepp, a firm that tracks commercial mortgages, separately told The Real Deal that from January 1 to September 30, 2008, Tishman Speyer, the owner of Stuyvesant Town and Peter Cooper Village, reported revenues of $210 million, with net operating income of $101 million. However, the debt service for the first nine months of the year was $147 million, Trepp reported. That would likely have forced the owner to make up the difference — $46 million — with its interest reserves.
Fitch said in the event of a default on the debt, the loan’s servicer Wachovia would “advance debt service on the trust portion.”