Locked down but not locked out

BORROWER ‘Value Add’ Investor-Developer
AMOUNT £10.9 million
LOAN TYPE Investment Finance Term Loan
LOCATION Greater London
LTV 69%
Mid Term Investment with Stabilisation Period
• Underwritten and drawn during Covid-19 lockdown
• Equity release
• Interest margin reductions as the building
achieves letting benchmarks

UTB’s Structured Finance team were approached by an existing customer to refinance a recently completed development of 45 apartments.

The customer, a successful property investment business and landlord, approached UTB during the Covid-19 lockdown with a view to refinancing an existing development loan on to a longer-term investment facility and release equity from the company’s latest project back in to new commercial investment opportunities. The Bank’s Structured Finance division has completed in the region of £40m of loans to support new and existing customers with similar requirements since the lockdown began.

The Borrower typically acquires properties, in this instance a redundant office block, adds value via planning enhancements, conversion and upgrades and retains the completed scheme in its substantial rental portfolio. This particular development was completed at the outset of the Coronavirus outbreak resulting in what could be an open-ended delay to the letting process and income generation.

Despite the challenges presented by the Covid-19 lockdown, UTB’s Structured Finance team was able to offer and subsequently complete a flexible hybrid solution giving the customer additional breathing space to find tenants and a competitive interest rate reducing when the apartments are let and income is generated.