The Trump company may have difficulty repaying debt 3
The Trump family’s company must handle more than $400 million in maturing debt in the context of real estate difficulties due to the economic recession.
Compared to the existing high-quality assets, the Trump Organization’s debt is not heavy.
`Capital is still available for the right deals. But the environment is becoming more and more challenging,` commented Steven Buchwald – Director of Mission Capital Advisors.
Entrance to Trump International Hotel in Washington on March 16. Photo: Reuters
Trump’s debt-driven deals could subject him to more scrutiny from his opponents if he is re-elected.
US House Speaker Nancy Pelosi once called the Trump Organization’s debts a national security issue.
WSJ said there were very few financial institutions willing to work with Trump before he was elected, due to the US President’s complex financial history.
Another challenge comes from the Trump Organization’s own assets.
One of the first debts due is $100 million of Trump Tower, in September 2022.
The fact that Trump retains ownership of the business while President has long been criticized by many.
The Trump Organization said the company has made efforts to reduce conflicts of interest, such as donating profits from foreign governments to the US Treasury Department.
In recent years, the Trump family has added tens of millions of dollars from selling assets.
Since income from these properties is the main determinant of loan size, the Trump Organization may have to reduce debt and focus more on stocks.
Trump’s loans worried many investors on Wall Street, including large funds such as Fidelity Investments, Vanguard Group, Neuberger Berman Group, TIAA, and Morningstar.
Devalued real estate also affects lending institutions like Ladder.
Deutsche Bank – another large lending institution with Trump’s company – in 2016 refused Trump’s (then still a US Presidential candidate) proposal to increase lending to Trump National Doral Miami.
The Trump Organization had many conversations with German banks many times earlier this year about the possibility of debt rescheduling when the pandemic appeared.
