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.
Type: 1st Mortgage Debt.
Sector: Residential.
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.
Type: 1st Mortgage Debt.
Sector: Office.
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.
Type: Preference Equity.
Sector: Retirement Living.
Stage: Construction commencement to construction completion (32 months).
Scenario: A developer who specialised in retirement living developments wished to expand one of their existing estates to include an apartment style retirement living product.
An existing bank was in-place secured over the existing estate and had provided their support for the expansion component of the estate. The developer was seeking a suitable longer-term funding party to provide equity-like funding behind the bank. This funding was to be introduced before the commencement of the expansion, whilst development approval was obtained, and remain until completion of the development.
Barwon made available a Preference Equity facility up to a peak 73% loan-to-value ratio with the developer providing the remaining equity to have the development fully funded. The combination of the bank debt facility and Barwon’s Preference Equity facility enabled the commencement of the expansion of the Retirement Living Estate.
Type: 2nd Mortgage Debt.
Sector: Residential Land.
Stage: Site acquisition to construction completion (18 months).
Scenario: A developer had secured a well-located land subdivision 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 85% of Total Development Costs being a 70% Loan-to-Value ratio. Amongst other benefits, the pricing of this facility significantly enhanced the developer’s equity returns from the project.
Type: 1st Mortgage Debt.
Sector: Residential Apartments.
Stage: Residual Stock (15 months).
Scenario: A developer who had recently completed the development of 19 apartments was seeking a facility to repay their bank and mezzanine debt construction facilities and allow for time to sell-down the majority of the apartments in an orderly fashion.
Due to the location and buyer target market, being owner occupiers, the developer required significant flexibility in the required sales momentum. In addition to this, the borrower required a partial direction of settlement proceeds to repay select investors.
Barwon made available a First Mortgage Debt facility to a 65% Loan-to-Value ratio, tailored to the sell-down timeline and provisioned for an equity release when the facility was repaid to a lesser loan-to-value ratio.
Type: 1st Mortgage Debt.
Sector: Hotel.
Stage: Refinance and bridge to a longer-term refinance (36 months).
Scenario: An owner of a recently developed hotel was seeking a funding solution to fully repay their bank construction facility and allow time for the hotel to reach its stabilised trading levels.
The developer was seeking a facility to do this but in addition, they were seeking a facility that allowed them flexibility to test different initiatives whilst the hotel was in its trading-up stage.
Barwon promptly made available a First Mortgage Debt facility which went to a 55% Loan-to-Value ratio. This fully funded both the refinance and also accommodated the trading-up stage of the hotel. The key component of this was no inclusion of an interest coverage ratio (ICR) covenant. This allowed for the income to fluctuate in its early period of trading, which is common in new hotel operations. Once the income of the hotel is stabilised, and the Borrower is then able to show two years of accounts, they will seek to refinance the Barwon facility with a longer dated bank facility.
>Type: 1st Mortgage Debt.
Sector: Residential Townhouses.
Stage: Residual Stock (18 months).
Scenario: A developer who had recently completed the development of 15 luxury townhouses was seeking a facility to repay their bank construction facility and allow time to sell-down the majority of the townhouses in an orderly fashion.
Due to the location and buyer target market, being owner occupiers, the developer required significant flexibility in the required sales momentum, and also a facility that allowed for leasing of the townhouses until they were sold.
Barwon made available a First Mortgage Debt facility to a 65% Loan-to-Value ratio, tailored to the sell-down timeline with a longer than typical duration and with the flexibility to allow for leasing.
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.
Type: 1st Mortgage Debt.
Sector: Residential Land
Stage: Residual Stock (12 months).
Scenario: A developer who had recently completed the development of 60 residential land lots was seeking a facility to repay the tail of their bank construction facility and provide for an equity release to progress a nearby project.
The location of the titled land-lots was sub-regional and in a market that was well supplied with competing product. Therefore, the developer was having issue in sourcing a funder that could see the potential and depth of the buyer market.
Barwon was well acquainted with the location and promptly made available a First Mortgage Debt facility to a 65% Loan-to-Value ratio. This facilitated the requested equity release for the Borrower at settlement and allowed for a well-resourced sale campaign.
