Pallaskenry, Limerick - Tranche 5
Update from the developer:
Limerick Council is purchasing all 16 units in this development. The Council has informed Top Drawer Developments, our Borrower, that as these houses will be used as social housing and that the units are nearing completion they can continue building on the site during the lockdown. The lockdown will however slow down completion, as some suppliers and third party contractors will be working on a restricted timetable. The developer is closely monitoring this project, the developer's QS visited the site last week and agreed with the developers' scope of work and handover of 8 units to the council at the end of March. The developer would like to remind all lenders that this extension comes at an extra cost to the borrower and interest will continue to accrue over the extended period.
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
- LTGDV: 69%
- Term: 6 months
- Final Repayment Date: January 2021
- Amount: €200,000
- Amount Raised to Date: €1.2m
- Exit: Sale of properties to Limerick County Council
Exit: Expression of Interest for all 16 Units