Below are some current and historical examples of where Barwon has been able to provide suitable tailored funding solutions. Should you have a scenario that you would like to discuss with Barwon please contact Jonathon Pullin.
Case Study 1
Type: 1st Mortgage Debt.
Stage: Site acquisition to construction commencement (15 months).
Scenario: A developer with a history of securing bank funding for the acquisition of their development sites found the bank was less supportive of this particular project due to its location.Approaching the settlement date, the developer was considering funding the entire amount of the land purchase with their own equity funds as they had previously had an unfavourable experience with non-bank land acquisition facilities.
As an alternative, Barwon made available a First Mortgage Debt facility to a 65% Loan-to-Value ratio, tailored to the project timeline and at a lesser cost than other non-bank facilities as the developer’s past experience was recognised.
Case Study 2
Type: 1st Mortgage Debt.
Stage: Refinance and bridge to a longer-term refinance (12 months).
Scenario: An owner of an existing income producing warehouse building was nearing the end of the term for their bank core debt facility and the building needed some minor refurbishment works.The owner was seeking a funding solution that would promptly refinance the existing bank core debt facility and fund the refurbishment works.
Barwon promptly made available a First Mortgage Debt facility which went to a 60% Loan-to-Value ratio. This fully funded both the refinance in the required timeframe and the refurbishment works. Once improved the Loan-to-Value ratio will likely be reduced through value uplift and a longer-term debt facility will be introduced to facilitate the refinance.
Case Study 3
Type: 2nd Mortgage Debt.
Stage: Construction commencement to construction completion (14 months).
Scenario: A developer who specialised in industrial developments across Australia had progressed one of his industrial land projects forward to construction commencement.A suitable number of pre-sale agreements were in place and an appropriate civil contractor had been appointed to satisfy the bank’s conditions precedent. Being an industrial project, the bank facility peaked at 60% of total project costs, requiring the remaining 40% of costs to be sourced by the developer.
Barwon made available a 2nd Mortgage Debt facility up to 85% of total project costs subordinated to the bank, with the developer providing the remaining 15% of costs to have the development fully funded. The combination of the bank debt facility and Barwon’s 2nd mortgage debt facility enabled a reduction in total project costs compared to the complete non-bank solution and was also more tailored to the developer and the development.
Case Study 4
Type: 2nd Mortgage Debt.
Stage: Site acquisition to construction completion (28 months).
Scenario: A developer had secured a well-located apartment development site and was seeking a funding partner to assist and remain through the duration of the project.The developer had a range of funding options but was primarily focussed on a funding partner that allowed them to retain full control and flexibility of the project, particularly in the early stages, and keep their weighted cost of capital down by allowing for a bank facility as the senior debt piece for the construction stage.
Barwon made available a multi-tranched 2nd mortgage debt facility which was subordinated to the bank. During construction the facility went to 88% of Total Development Costs being a 75% Loan-to-Value ratio. Amongst other benefits, the pricing of this facility significantly enhanced the developer’s equity returns from the project.
Case Study 5
Type: Preference Equity.
Sector: Child Care.
Stage: Construction commencement to construction completion (16 months).
Scenario: A developer had secured a site suitable for a Child Care development and had also identified several other suitable Child Care development sites.With a pipeline of Child Care projects and the associated requirement for equity capital funding, the developer was seeking a funding partner that could provide multiple facilities that would allow for each of the projects to be progressed at the right time in the market, as opposed to being dictated by the developer’s availability to fund equity capital.
Barwon made available a preference equity facility that went to 95% of Total Development Costs being an 85% Loan-to-Value ratio. This funding solution allowed for the developer to progress each project with less of their own equity capital than normally would be required.
Case Study 6
Type: Fund Through.
Sector: Health Care.
Stage: Construction commencement to ongoing ownership.
Scenario: A developer had secured a site suitable for a Health Care facility and had arranged several key agreements for lease.The developer was experienced in delivering similar scale projects however they had limited experience in the Health Care sector. As a pure developer, they had limited appetite for the ongoing ownership of the asset and were aware of the prolonged period to completion that can occur and the risks of on-sale.
Barwon made available a complete fund through solution to the developer that comprised the provision of equity funding required behind the bank facility through the construction phase, and a pre-agreed purchase of the project at practical completion. In addition, Barwon assisted in introducing a suitable bank construction facility.