Case Study | Balmain, NSW
Structured finance loan, borrowing against a portfolio of property assets | $30 million, 12 month interest loan with a 78% LVR.
The developer sought finance to assist with the purchase of the site and construction finance for the 22 construction and development of 22 residential apartments. They had started marketing and presales and wanted to move forward with construction finance during the process.
The client sought to refinance borrowing against a portfolio of property assets, which included a mix of medium density residential, commercial and development land, plus provide for capitalisation of interest, cost & fees for 12 months, while the portfolio was rationalised.
The client required a highly geared and complex facility structure to accommodate its plans. Three (3) properties/parcels in Sydney’s Inner West were being offered as security;
- A retail investment property;
- A multi-unit residential property for which a sales campaign had just commenced; and
- A combination of residential and industrial properties earmarked for redevelopment, for which a rezoning approval was pending.
The proposed new facility had also to be sanctioned by a second mortgagee with a large loan exposure.
DFP was able to leverage the strong relationship with its capital partner to work up a funding solution based on a 78% Loan-to-Value Ratio, comprised of a combination of senior and mezzanine debt to:
- Retire the exiting first mortgage debt;
- Pay-down part of the second mortgage debt; and
- Provide for fees and capitalised interest for 12 months.
To facilitate the funding DFP also negotiated debt reduction milestones based on a minimum sales target for part of the multi-unit security.
Thereafter, we assisted the just completed settlement of the transaction by facilitating communication between the borrower, the incoming lender, the existing second mortgagee and four (4) participating legal firms located in three states.
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