Over the course of this year, I've been posting about the demise of Premier Properties and its owner Christopher White. Click here for post and links to all the prior media reports.
Today, The Indianapolis Star, courtesy of a report by The Wall Street Journal, has an insightful article entitled "Premier's Collapse Ruffles Lender." The piece focuses on the Premier/White saga from the perspective of mezzanine lender Dominion Capital.
As some of you know, borrowers such as White's real estate development company use mezzanine loans to secure supplementary financing for projects, which financing may be required by the primary construction mortgage lender. Mezz loans often are collateralized by the stock in the development company rather than the developed property itself. They're borderline unsecured loans and thus have high interest rates (20+%). It's my understanding that mezz lenders like Dominion are feeling the pain from the current credit crisis. The WSJ article supports this.