Stephen Ross’ Centerline Could Default

Centerline Holding Company, headed by Related Companies bigwig (and REBNY chairman) Stephen Ross, may not be able to meet its short-term debt obligations, according to this morning’s Wall Street Journal, which cited a Moody’s Investment Services report that further cut Centerline’s credit rating.

Here’s more:

The move comes as the credit-market turmoil, coupled with the weakening commercial real-estate market, has severely hurt Centerline’s business of lending to owners and developers of office, retail, multifamily and other types of properties. A potential default by Centerline would also deal a blow to Mr. Ross, who made an equity infusion in Centerline in December 2007. Mr. Ross’s company, Related Cos., is the largest shareholder of Centerline. He didn’t return a call seeking comment.

Moody’s, which downgraded the company’s rating to B1 from Ba3, said in a news release that it believes Centerline’s "liquidity resources may not be adequate for meeting its near term needs." In particular, the credit-rating firm noted that Centerline must repay in full a term loan by Dec. 31.

The $109 million loan, which matures in December, requires the company to pay it off through periodic payments. By the end of August, Centerline had paid it down to $75 million. The company then had about $50 million of total liquidity, including cash and revolving credit lines.

Centerline president Mark Schnitzer told the Journal, "We fully expect to repay all our debt obligations as they come due." Stephen Ross’ Centerline Could Default