Fortress' Eurocastle posts deep 1Q09 loss, to raise e130m in 20% perpetuals

Eurocastle Investment, the German commercial real estate group controlled by New York's Fortress Investments private equity firm, posted a net loss after tax of e162m in the first quarter, narrower than the e264m in 4Q08 but much wider than an e84m loss in 1Q08. It also announced an issue of e130m in perpetual convertible bonds, paying interest of 20%. The losses primarily relate to non-cash valuation adjustments to the portfolio of some e130m. Funds from operations reached e12.3m or e0.20 per share for the three months ended 31 March, down from e22.6m or e0.35 per share for 1Q08 but better than the fourth quarter performance. Eurocastle owns some e6.0bn in total assets, of which e4.0bn in property and e1.7bn in debt investments. However, it is carrying debt of e5.2bn, giving net assets of around e654m. It said NAV per share at end-March was e10.60, comprising e1.07 for the debt investment business and e11.67 for the commercial property portfolio.