As Vedanta Hedging reported in May this year, the most expensive UK building sold in 2007 was the Citypoint tower for £650m. This is also the UK Headquarters of the international law firm Simmons & Simmons.
On Wednesday, KPMG were appointed as Receivers over the building.
Earlier this year, there was a £100m break-cost on the swap which was mis-matched to the length of the loan. The swap continues until 2016.
This is one of the problems that many SMEs are complaining about, in that having a derivative longer than the borrowing could subject them to extra risks if not explained clearly to them.
Vedanta Hedging is working with several clients who have gross borrowing amounts exceeding £100m. This issue of potential swap mis-selling is not just related to SMEs.
The media and political focus will of course remain on these SMEs for obvious and valid reasons. But it is worth remembering that this is a complex, global issue that many people do not fully understand. Many large organisations and sizeable property companies are silently suffering with the huge burden of swap liabilities. Not all of these of course have been mis-sold, but the liabilities are of course exacerbated where the derivatives have not been correctly advised.
It is essential to obtain FSA Authorised advice from an Independent source when discussing and negotiating derivatives.