United Trust Bank’s (UTB) Structured Property Finance team was approached to refinance the debt on a residential led mixed-use development project nearing practical completion.
The borrower, an experienced Property Investor and Developer, wished to borrow £8m to exit their original Development Finance loan which was nearing the end of its term and to release additional capital to settle their CIL obligation. Failure to complete the loan on time would result in additional interest and fees from the incumbent lender.
The scheme, a new development of townhouses and an apartment block with ground floor commercial space, was being retained by the developer in their extensive portfolio and had very quick and full uptake for the residential aspect and strong demand for the commercial space.
UTB initially agreed to provide the £8m serviced loan on the basis that the property would be fully let prior to drawdown. However, as the deadline to repay the existing lender approached, the commercial space remained vacant. By working closely with the borrower and the introducing broker, UTB agreed upon additional makeweight security to enable the facility to complete on time, thereby avoiding late repayment penalties for the borrower.
The 24-month facility gives the borrower flexibility to hold, sell or refinance the properties on to a longer-term investment loan depending on longer term funding costs in the debt markets.
| Borrower | Landlord |
| Amount | £8 million |
| Loan Type | Residential Investment loan |
| LTV | 70% |
| Location | South London |
| Term | 24 months |
| Loan Purpose | Refinance |
| Special Features | Original drawdown conditions amended during the due diligence process Refinanced against a strict deadline to avoid punitive interest and fees |