Don’t be fooled by news of Boston Properties $215M construction loan

If you hear a quick soundbite that Boston Properties has obtained a $215 million construction loan to complete it’s 854,000 square-foot mixed-use project in Boston — don’t assume it’s a sign that the tight credit markets are loosening.

As usual, the devil is in the details.

According to the Wall Street Journal, this past January BP was hoping to borrow $320, but some potential lenders who BP seemingly thought would be willing to open their pocketbooks, ended up opting out, forcing BP to dig deeper into its own pockets.

The 5-year loan comes with a floating interest rate that’s equal to the London interbank offered rate, plus 3 percent annually.

Though he declined to give intricate details, BP’s cfo admitted that the loan also has a “recourse” provision, which means if BP can’t raise sufficient proceeds to service the debt — they’re personally on the line to make the repayment out of their own pockets.

There is a good chance that some lenders likely were more willing to loosen their purse strings for this project because 81-year old institutional asset manager Wellington Management Co., estimated to have about $420 billion under management, is planning to habitate in about 450,000 square feet of the office space of the Boston waterfront building due to be completed in 2011..

In other news, all eyes this morning are on Bank of America and Morgan Stanley, who are both meeting with their shareholders today.

On the Bank of America front, most will be particularly interested to see if there are any voices raised to have CEO/Chairman/President Ken Lewis give up his chairmanship side of his tri-titles.

My guess is the shareholders wimp out of forcing the issue and give a lot of lip service.

As for Morgan Stanley, many will be interested in listening for any clues on whether they may need to raise more capital, especially following the recent stress tests.

Meanwhile, Citigroup is dealing with its own issues regarding concerns pay restrictions might be tearing apart its energy-trading unit. They’re asking the Treasury to greenlight their request to give special bonuses to many of their employees.

I’m resisting the temptation this morning to go off on a tangent about that.

Same names on my due diligence list.

Just remember the usual disclaimer: Don’t base any of your investment decisions on anything you read here — do your own due diligence — or at least enough research to pick the right professional to do it for you.

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