The Bank of England is warning that a large amount of maturing debt in Europe could lead to a potential increase in defaults on loans by British lenders to commercial real estate developers.
The Dow Jones News Service reports that the Bank of England says developers face a ‘refinancing challenge’ this year with $78 billion commercial real estate loans maturing. The central bank adds that some developers may not be able to repay their existing loans due to higher borrowing costs.
‘It is not clear if it will be possible to refinance these loans on current market terms,’ the Bank of England says. ‘This could lead to an increase in defaults and reduce the willingness of banks to exercise forbearance.’
