A flexible, revolving facility for a complex case

A flexible, revolving facility for a complex case

Once UTB’s Structured Finance (SF) team establish a relationship with a client, it continues to develop as the client’s needs and requirements change. When we were first approached by this client in May 2017 the client simply required a facility to complete the development of a non-trading hotel in Central London whilst they also regularised the planning consent. Following meetings with the clients to establish what they were looking to achieve over the next three years we not only funded the completion of the hotel but combined this facility with the acquisition of a further development site which had the benefit of a planning consent for a mixed-use scheme.

Since then our relationship has continued to strengthen, and we have assisted with funding other residential assets as the clients have grown their portfolio. Our expectation when we first funded the hotel development was for the planning consent to be quickly regularised and that within 12 -18 months the hotel would reach a mature level of trading which would see the Bank repaid through long term investment finance. However, the regularisation of the planning consent took longer than expected and the hotel is still establishing occupancy and income levels.

The structured finance team recognises that repayment strategies can change over time and there are some matters which are beyond the client’s control. Consequently, we have adopted a flexible approach and have approved a new three-year interest–only facility at up to 55% LTV. As the current balance of the loan is well below 55%, this pre agreed facility funding line allows the client to draw funds in under 24 hours.

Gerard Morgan Jackson, Head of Structured Finance, commented: “Now that planning has been regularised, we have agreed a revolving facility which provides the client liquidity as and when they require, thereby supporting their ongoing property acquisitions. This is something we have been able to offer many of our clients as it gives them flexibility and the ability to move quickly when suitable opportunities arise.”

Client, Masrur Ahmed said: “The key to our strong relationship with UTB is that the Bank understands the complexity of the property business and continues to support us as developers.”

Borrower
  • Hotelier/Developer/Property Investor
Amount
  • £5.9m
Loan Type
  • Refinance existing facility and convert to a three-year term facility
Location
  • Central London
LTV
  • 41% day one
  • Up to 55% (revolving facility)
Project type
  • Portfolio comprising

      (i) A trading hotel of 79 bedrooms

     (ii) A building with planning permission for demolition and erection of new six storey mixed use building

 Special Features
  • Offshore structure
  • Unresolved planning issue
  • Pre-approved ‘hunting license’


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