Morgan Stanley Defaulted on a Loan and Walked away from Offices in Tokyo [View All]

[Poboy]

Just a business decision to burn their debt holders and because they are a bank it is just fine. Now you make a business decision to walk away from an underwater house and you are the lowest form of life on the planet. They got special rules.


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Morgan Stanley fund fails to repay debt on Tokyo property
By Junko Fujita Junko Fujita – Fri Apr 15, 1:30 pm ET
TOKYO (Reuters) – A Morgan Stanley property fund failed to make $3.3 billion in debt payments by a deadline on Friday, handing over the keys to a central Tokyo office building to Blackstone (BX.N) and other investors, the largest repayment failure of its kind in Japan.

It marks the latest fallout from a series of highly leveraged investments by Morgan Stanley (MS.N), one of the most aggressive investors in worldwide property markets before the global financial crisis.

The $4.2 billion MSREF V real estate fund missed its April 15 deadline to repay 278 billion yen($3.3 billion) worth of debt packaged in commercial mortgage-backed securities on the 32-storey Shinagawa Grand Central Tower, a property which has seen its value plunge, two people involved in the transaction said.

They spoke on condition of anonymity due to the sensitive nature of the matter.

A Morgan Stanley spokeswoman in Tokyo declined to comment. A New York based spokesman for Blackstone, which holds the most junior portion of the debt and gains the right to market the building for seven months, was not immediately available for comment.

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http://news.yahoo.com/s/nm/20110415/bs_nm/us_morgan_stanley_real_estate