Canary Wharf's Fall Shakes Already Wary U.S. Bankers
Kleege, Stephen, American Banker
Olympia & York's Canary Wharf bankruptcy filing this week in London gives U.S. bankers another reason to think twice before lending abroad.
Few needed convincing. Overseas lending by U.S. banks fell by $2.7 billion last year, to $711.6 billion, according to the Bank for International Settlements. But there had been signs of a pickup toward yearend - and the bankruptcy of the huge development in London's Docklands area may halt the rebound.
Olympia & York Developments Ltd. placed the project under court administration Wednesday. Canary Wharf is more than $2 billion in debt.
U.S. Assets Unaffected
The filing was the latest chapter in the downfall of Olympia, which filed for bankruptcy protection in Canada May 14.
The developer's U.S. real estate assets were unaffected by either bankruptcy filing. But U.S. bankers said Olympia's collapse has long-term effects on their foreign lending and investment.
"The shock is quite dramatic," said John F. …