IntaCapital Swiss - Case Study - Residential Property Development

Residential Property Development, (Holland).

Proposal

Collateral Transfer Facility – To act as back-up support and enhancement.

  • Brief : To obtain suitable collateral to bolster or enhance ability and to act as a fall-back in the event further funding was required.
  • Total Facility Requirement : € 30 million
Facility Obtained

European based Provider Group

  • Facility Secured : Collateral Transfer Facility of € 30 million
  • Annual Contract Fee : 5.15%
  • Term : 12 months (renewable to 2 years if required)
  • Deposit against Contract Fee : € 375’000

A Dutch construction company with modest experience required third-party support in order to satisfy and qualify for a tender bid for a Housing project. IntaCapital succeeded to obtain a Collateral Transfer facility that acted for the client as ‘an injection of capital on stand-by’. This meant that client held the collateral in the event that they may require further funding. The collateral acted as a temporary financial enhancement whilst it was in their possession.

The investment was made via the medium of a Demand Guarantee (issued under standard terms). Once the collateral (the Bankers Letter of Guarantee) had been received at the client’s bank, the client decided to apply to his domestic bank for a structured loan advance based upon a forward exit strategy for the development.

This facility acted as a short term bridge loan to allow them to bridge their funding shortfall to kick-start their development. The exit strategy of the sale of the properties (or refinancing of them in the event they did not sell) gave the client the suitable repayment vehicles.

The rates we were able to obtain for the client were very competitive as the Provider of the facility considered the project of low risk given that it was residential housing with several pre-sales and safety nets.

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