SOUTHWEST REALTY <SWL> HAS LIQUIDITY PROBLEMS
Southwest Realty Ltd said it believes it
could make all of its scheduled montly debt service payments
for 1987 despite the falloff in its rental operations, but
making the payments would probably severely impair its
liquidity and restrict its ability to maintain the quality of
its properties.
    The company today reported a 1986 loss of 1,544,000 dlrs
compared with a 1985 profit of 3,912,000 dlrs.
    Southwest said in addition to its monthly scheduyled debt
service payments, a 1,743,000 dlr loan on one of its Houston
properties is due to mature on April One.
    Southwest said a commitment to reduce the interest rate and
extend the Houston loan for one year has been accepted.
    It said talks are underway with lenders on other Houston
properties to obtain partial debt service moratoriums which, if
granted, would cut 1987 cash deficits from 1986 levels.  The
loan renegotiations could involve bankruptcy or other
litigation connected with the specific properties involved and
could involve the suspension of interest and principal payments
to some of the lenders.  Southwest said if the attempts to
restructure debt do not succeed, it could lose one or more of
the properties.
    Southwest said the Houston properties made up about 10 pct
of its current value equity as of December 31 of 14.20 dlrs per
share, down from 16.68 dlrs a year before.
    The company said depending on the success of the talks and
operating results for 1987, one or two more properties could
become subject to similar negotiations.  The two additional
properties comprised about 11 pct of its current value equity
at year-end, Southwest said.
 Reuter
