When German retail group Arcandor went into
administration, the payments owed on four tranches of CMBS
notes structured under UK law were under threat.
Here, the lawyers involved explain how, for
the first time, they extended the maturity of both the loan and
notes, and why bondholders agreed to the new
In 2006 Goldman Sachs granted a loan to German partnership
Highstreet. This was then securitised in a classic commercial
mortgage-backed securitisation (CMBS) called Fleet Street
Finance Two, which had a pool of assets that comprised the wide
portfolio of commercial property in Germany let to the Arcandor
The single tenant meant that the only source of payment on
the loan came from the rent payments from Arcandors two
retail companies Karstadt and Quelle. So payments on the
securitised notes issued by Goldman were wholly dependent on
the continued health of those tenants.