Vornado Finances GM Building in NYC

Vornado Realty Trust, Paramus, N.J., has made a $200 million mezzanine loan on the General Motors Building in Midtown Manhattan.Conseco sold the property recently to Macklowe Properties for $1.4 billion. Vornado, an office real estate investment trust, said the loan is subordinate to $900 million of other debt. Interest on the loan is variable, based on the London interbank offered rate plus 8.685% (with a LIBOR floor of 1.5%), Vornado said. The current yield on the three-year loan, which can be extended for three one-year periods, is 10.185%. Vornado is also participating in another $50 million loan on the property with an affiliate of Soros Fund Management, the REIT said. This $25 million loan -- which is also a subordinate loan, junior to the first $1.1 billion of loans -- carries interest at LIBOR plus 12.81%, and currently yields 14.31%. It matures in October 2005, with three possible one-year extensions. Vornado said it expects to fund the second loan in the next month.