Senior Debt plus Equity/Mezzanine Funding

Our client was looking to purchase a site in Milton Keynes for £10m which had consent for 100 plus residential units. They were very active developers and had six other sites under construction, which had caused a drain on their cash resources and the equity that they could inject into this transaction.

Funding requirement: the development appraisal set out total costs of £17m against a GDV of £26m. We were instructed to source the full costs of the project on the most favourable terms for the client without them having to inject any significant cash into the costs.

Facility provided: we negotiated a structured finance deal with a senior debt lender providing £13m and an equity provider funding the balance of the £17m costs. The senior debt had standard pricing terms and the equity partner agreed a fixed coupon for their funds of 20% rather than a profit share as this was the client’s preference.