The $375 million One Park Avenue pari-passu loan securitized in BACM 2007-2 and BACM 2007-3 is expected to pay off at par. This effectively extends the unscheduled principal payment to these conduits deals' short-dated tranches, according Barclays Capital analysts.

The original $375 million pari-passu structure is anticipated to pay down at par as early as the next remittance period. It is also likely that the prepayment covenants will be waived.

According to Barclays, the loan was in its defeasibility period when the sale occurred and, if the loans get defeased, the defeasance should be executed to the first open date, which Barclays said was nine months from now.

"This means that the loan will still be paid off earlier than what was earlier anticipated (rather than being modified and extended)," analysts said.

The recapitalization included origination of a new $250 million, five-year loan by Morgan Stanley and a $180 million equity infusion from Vornado that now has about 95% ownership in the property. The residual 5% is retained by one of the original sponsors named Murray Hills, according to Barclays analysts.

The recapitalization, they said, was triggered by RXR, which bought $25 million of the senior mezzanine $75.4 million note from Concord Debt Holding, and was considering starting foreclosure action.

The residual $50.4 million of the senior mezzanine note was held by Citigroup and the junior mezzanine component ($32.6 million M2 note) was funded post closing and held by Bank of America.

"It is likely that the junior mezzanine will be paid off with a deep discount, while the senior mezzanine component will be taken down closer to par," Barclays analysts said.

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