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Blackstone Inc has failed to make payments on a bond worth 531 million euros ($562.5 million) that was secured by a collection of offices and stores owned by Sponda Oy, a Finnish company. This was due to the increasing interest rates that have negatively impacted the value of European properties. Although the private equity firm requested an extension to repay the debt, the bondholders rejected this proposal, according to an insider familiar with the situation.
Blackstone Inc has failed to make payments on a bond worth 531 million euros ($562.5 million) that was secured by a collection of offices and stores owned by Sponda Oy, a Finnish company. This was due to the increasing interest rates that have negatively impacted the value of European properties. Although the private equity firm requested an extension to repay the debt, the bondholders rejected this proposal, according to an insider familiar with the situation.
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Blackstone expressed disappointment that the servicer did not accept their proposal for the debt, clarifying that it only applies to a small part of the Sponda portfolio. The company emphasized their confidence in the management team and the core portfolio.
The bond, which initially covered 63 buildings mainly in Finland, was guaranteed by Citigroup and Morgan Stanley. However, Blackstone had already sold around 16 properties to pay off almost 50% of the debt. The remaining balance on the note is 297.1 million euros. Additionally, Blackstone’s $71 billion real estate income trust, BREIT, has also been facing issues, with withdrawals being restricted for the fourth month in a row.
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