As lenders may know, the originator has granted a 3-month extension on this facility after discussions with the borrower in early January. The borrower sought this extension and provided an updated schedule showing the completion and handover of 10 houses to the council by this date.
The originator has been monitoring the progress of this site on a weekly basis throughout the extension period and it's become clear that the end of March deadline will not be met.
Instead of granting a further extension, all parties have agreed that refinancing with another lender is now the preferred way forward. All parties are now working towards a refinance of the facility and it has been confirmed by the borrower's solicitor that an offer to refinance has been received and a fee has been paid to the new funder to conduct due diligence.
The originator would expect this to complete by the end of April. If the refinancing does not complete, the Property Bridges team will assess alternative options at that point.
Works are continuing on-site in Pallaskenry. There was a pause on construction because of the Covid lockdown. This delay has resulted in a prolonged build period, which will see the houses completed in January.
As previously advised negotiations are nearing completion with the Council for the purchase of all 16. Prices and fit out requirements have been agreed. We have received confirmation from the Council that the final sign off from the Dept of Environment is expected shortly.
Our QS continues to visit the site regularly and is in agreement with the value of works completed so far. The Borrower requires further funding as per our loan agreement with him to continue the construction process, accordingly, we are now raising the next tranche of this facility for a further €200,000 at an interest rate of 8%. The term of this tranche is 6 months with a minimum interest period of 4 months.
Please refer to the original credit paper for more details on this proposal. Please note that the original credit paper stated an interest rate of 8.5% where the exit strategy was an open market sale. As stated above, the exit has changed to selling the units in advance to a local authority for social housing. The rate is now 8% to reflect the de-risked nature of the change in exit strategy.
Tranche 5 Overview
Interest rate: 8% per annum
Security: First Charge
Term: 6 months
Final Repayment Date: January 2021
Amount Raised to Date: €1.2m
Exit: Sale of properties to Limerick County Council
Exit: Expression of Interest for all 16 Units
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Invest in Pallaskenry, Limerick - Tranche 5,Limerick, Ireland