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MSREF-backed Songbird raises £895m

Songbird Estates, the London office company in which Morgan Stanley Real Estate has a stake, has announced a major fundraising to help pay back a loan.

Songbird Estates, the London office company in which Morgan Stanley Real Estate has a stake, has announced an £895 million ($1.45 billion; €979 million) fundraising to help pay back a loan owed to Citi group.

Songbird, which has a majority interest in Docklands developer Canary Wharf, said in a statement that it had fully underwritten a £620 million placing and open offer of shares and the sale of £275 million of preference shares that was arranged last month.

The preference shares have been placed with Qatar Holding and Fullbloom Investment Corporation, a subsidiary of China Investment Corporation, the Chinese sovereign wealth fund.

The fundraising is necessary to help pay back an £880 million loan owed to Citi Group.

Last month, the state of Qatar, along with Morgan Stanley Real Estate Funds, China Investment Corporation and Simon Glick’s GF Investments II, agreed to back a new rights issue by Songbird, to prevent it from breaching the loan.