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 ELKINS PARK, Pa., Aug. 19 /PRNewswire/ -- Mortgage and Realty Trust (NYSE: MRT) announced today that it had reached an agreement in principle with an official committee of holders of MRT's Senior Secured Uncertificated Notes due 1995 on the terms of a restructuring of the Secured Notes.
 The members of the committee currently hold approximately 43 percent of the Secured Notes.
 Pursuant to the agreement in principle, holders of the Secured Notes will be offered to exchange the $290 million in outstanding Secured Notes for approximately $195 million of new senior secured notes. Approximately $95 million of debt will be converted to 85 percent of the equity of restructured MRT. The agreement in principle anticipates that the new Notes will be issued in two series, $120 million of 7 percent notes maturing in 2003 with scheduled annual principal amortization and approximately $75 million in additional notes payable principally from available cash flow. MRT will have a limited right to reinvest available cash flow. The interest rate on the cash flow notes will be determined at the time of issuance based on the applicable federal rate (currently 6.26 percent), but not to exceed 7 percent. In addition, pursuant to the agreement in principle, on the scheduled Sept. 30, 1993, interest payment date, MRT will pay all 1993 restructuring fees relating to its 1992 restructuring and the interest due on the outstanding Secured Notes, with interest accruing thereafter on the outstanding Secured Notes at 7 percent. The accrued interest through March 31, 1994, will be added to the principal of the new cash flow Notes and any interest accruing after March 31 will be paid at closing. Holders of MRT's outstanding common shares will retain 15 percent of the equity of restructured MRT.
 MRT's agreement to pursue the restructuring proposal is subject to a number of conditions, including MRT's receipt of indications of support from members of the committee and additional holders of sufficient Senior Notes to effect the restructuring through either a "prepackaged" or a "Prearranged" Chapter 11 bankruptcy. Generally, as a condition to confirmation of a plan, the holders of allowed claims constituting at least two-thirds in dollar amount and more than one-half in number must accept the plan. At this time there can be no assurance that MRT will receive such support for the restructuring or that the other conditions to consummation of the proposed restructuring will be satisfied.
 Other details of the agreement, including the additional conditions to commencement and consummation of the restructuring, were not announced pending the filing of the exchange offer and consent solicitation materials with the SEC. No offers will be made, nor exchanges or consents accepted, other than pursuant to the exchange offer and consent solicitation. The advisors to MRT and the committee are negotiating additional terms of the new debt securities to be offered to the Senior Secured Note holders, as well as the formal documentation necessary to the restructuring. Details of the agreement in principle will be disclosed in that formal documentation, which is expected to be filed with the SEC in September.
 The Trust also announced today that the standstill arrangement with its creditors (which expired on Aug. 16, 1993) has been extended conditionally to Sept. 16, 1993.
 MRT is a self-administered real estate investment trust with a portfolio of more than $382 million of commercial, industrial and other real estate assets. MRT has offices in Elkins Park, and Burbank, Calif.
 -0- 8/19/93
 /CONTACT: Daniel F. Hennessey, treasurer, of Mortgage and Realty Trust, 215-881-1525/

CO: Mortgage and Realty Trust ST: Pennsylvania IN: FIN SU: RCN

CC-MJ -- PH029 -- 4526 08/19/93 17:33 EDT
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Publication:PR Newswire
Date:Aug 19, 1993

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