Blackstone Inc. is a leading asset management giant and a prolific real estate investor. The company has now defaulted on a $562.5 million bond backed by a portfolio of offices and stores owned by the Finnish company Sponda Oy. The default occurred as rising interest rates hit European property values. Blackstone had asked the bondholders for more time to pay back the debt, but they said no.As a response to that, private equity company shares decreased by 1.6%.
Sponda Oy is a Finnish real estate investment company that focuses on owning, leasing, and developing commercial properties in prime locations in Helsinki and other big Finnish cities.
The company was founded in 2000 and has been listed on the Helsinki Stock Exchange since 2006.
Sponda’s portfolio includes office, retail, and logistics properties. In 2018, Blackstone acquired Sponda.Despite the acquisition, Sponda operated as an independent company within the Blackstone portfolio, with its operations and management remaining largely unchanged.
Sponda-Blackstone relationship
An announcement was made in 2017 that Sponda would enter into an agreement to sell all of its shares to a fund managed by the world’s largest asset manager, Blackrock.
The deal was valued at approximately $1.9 billion and was one of the largest real estate transactions in the Nordic region at the time.
Under the terms of the agreement, BlackRock acquired all of Sponda’s outstanding shares and assumed control of the company’s property portfolio.
The purchase was part of BlackRock’s plan to grow its ability to invest in real estate in Europe and to get a bigger share of the Nordic market.
The deal also showed that there is a growing need for good commercial property in the area, especially in Finland.
In a statement sent via email on Thursday, Blackstone stated that “a minor fraction of the Sponda portfolio is affected by this debt. We regret that the service provider did not move further with our proposal “.
We still have complete faith in the Sponda portfolio and its management team, added the company.
Blackstone’s $71 billion unlisted real estate income trust (BREIT), which also defaulted, has run into trouble.
BREIT recently disclosed that it had to restrict withdrawals for the fourth consecutive month, demonstrating that the corporation still has difficulties in the current market.
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