In the middle of the last decade, banks were so high on their bonus culture that they began looking for more ways to shovel money out the door. The solution, it seemed, was the convertible mortgage-backed securities (CMBS) market – basically bonds securitised on particular properties.

These off-balance-sheet lending vehicles "were essentially a way to get mortgages off the books so they could lend more", said one senior source last week. "The other great advantage for the banks was that they were lucrative on the fees side."

But what was the advantage for the building's nominal owner, whose mortgage ended up in the vehicle? Cheaper repayments, and this drew in several well-known names in the middle of the last decade.

One of the first to move was Treasury Holdings' Real Estate Opportunities, which said it would save investors €3m in interest annually on 16 properties and that this would allow it to repay existing bank debt and free up cash for further expansion.

"We agreed a €375m seven-year loan, secured against 16 retail and office properties which account for €500m of REO's €850m Irish property assets," the company said. "There was also a €50m junior loan from Anglo Irish Bank."

Others followed but enjoyed mixed fortunes. In recent weeks, Noel Smyth's Alburn failed in its offer to bond-holders of a stake in part of its British portfolio if they agreed to sell back their debt at a sharp discount. The offer was conditional on 75% support and failed to secure that. A steering committee to assess other options has now been recommended and they are due to meet Smyth in February.

Brian O'Donnell and his wife, Dr Mary Pat O'Donnell, also went the CMBS route. They are involved in a dispute with Bank of Ireland, which is seeking to recoup €69.5m in unpaid property loans.

A stock exchange announcement last October said the loan on the O'Donnells' Columbus Court building in Canary Wharf in London had been due to be repaid in full on 20 October but that it hadn't happened. More than £69.5m was outstanding at that date.

As revealed in this newspaper, the couple repaid the loan on their Columbus Courtyard a fortnight ago. Last week it emerged this had been done through a refinancing with US insurance company MetLife, another debt partner and Duet Private Equity.

Prior to the refinancing, O'Donnell and his wife, best known for their Vico Capital investment vehicle, owed the banks nearly €900m, according to a statement of affairs from July that was submitted in court in relation to the Bank of Ireland case. Their assets were worth nearly €1.1bn, they said.

Some of those borrowings related to other buildings they own that form part of convertible mortgage-backed securities.

Their Sanctuary Buildings in Victoria, which they reportedly put up for sale in October for £180m, is owned by Redicent, a company set up in Cyprus in May 2006. Redicent was a "newly established special-purpose vehicle ultimately owned by high-net-worth individuals based in Ireland". Set up solely to acquire the Sanctuary property, it had an outstanding loan of £146.2m when the CMBS was set up.

The borrower "also has indebtedness of £23.8m to the governor and company of the Bank of Ireland, Vico… and a number of other individual private investors", the security document states. This was subordinate to the main loan.

The Sanctuary deal was the largest individual slice of the CMBS and the building had a market value of £170m with annual rental income of £8.67m from the British government.

There may be worries ahead however. In 2005, the O'Donnells spent £140m acquiring 15 Westferry Circus, the home of Morgan Stanley in London. That too was later placed in a CMBS as part of a refinancing in 2006.

But last November, the owners of just £18m of notes in the £493.52m CMBS called a meeting proposing an extraordinary resolution that Palatium Investment Management be appointed as an operating adviser to the CMBS's servicer, Morgan Stanley.

It would advise about various matters in "relation to each specially serviced loan", including the possible "appointment of a receiver or similar actions". The extraordinary resolution was passed unanimously in December.