* Qatar Investment Authority deal sours
* Interest cover covenant breached
* Bondholders meeting on Wednesday
By Tom Freke
LONDON, March 27 (Reuters) - Lenders to NHP, one of Britain's biggest care-home owners, face big write-offs as a debt restructuring looms.
Bondholders will meet on Wednesday to form a committee to "consider and evaluate proposals for the restructuring of (NHP's debt)," Capmark, the administrator of much of the company's debts, said in a statement this week.
NHP is struggling under 1.17 billion pounds ($1.7 billion) of debt taken on when it was acquired by the Qatar Investment Authority (QIA) in 2006. Advised by Three Delta, NHP's debt was sold onto investors packaged as asset-backed bonds and subordinated debt in May 2007.
The deal has since soured because of falling revenues and a sharp decline in the value of 294 care homes, which act as collateral for the debt. The majority of NHP's care homes are operated by Southern Cross.
NHP's problems are echoed across the sector, where falling property values have undermined ambitious debt structures put in place at the top of the market.
Big operators McCarthy & Stone and Four Seasons have both been forced to restructure debt.
In December, ratings agency Fitch said the value of the properties had fallen 31 percent since May 2007 to 930 million pounds from 1.338 billion. The value of the restructured debt is likely to reflect the fall in the assets' value.
On Feb. 24, Capmark said the interest cover covenant in NHP's debt package had been breached, and on March 9 it said the borrower had failed to inject more money to "cure" the breach.
An interest cover covenant is usually a ratio of income to debt interest payments.
Capmark declined to provide any further details of the restructuring proposals.
Houlihan Lokey is advising Capmark alongside law firm Freshfields Bruckhaus Deringer. (Editing by Dan Lalor) ($1 = 0.6984 pound)