Problem
Boasting a Spain-based property portfolio in the region of €40M, this client found us in their search for innovative finance solutions. After taking a bridging loan against two of their properties, the client was struggling to secure finance to repay this due to the high value of the asset, affected by the COVID-19 pandemic. The client had also expressed an interest in diversifying their investments beyond the property realm.
Solution
With a flair for complex cases, we introduced the client’s portfolio and circumstances to a large multinational private bank. Having expressed a keen interest, the bank responded with the offer of a unique, bespoke package, involving capital raising 50% against the portfolio, repaying the outstanding debt, and creating a significant investment portfolio, allowing the client to diversify their profile.
Outcome
Incredibly, the client was given the green light to refinance his debt on an incredibly low interest rate, allowing him to capital raise significant funds, which were then re-invested with the bank for an average yield of 7% PA. As a net result, the income generated by the investment portfolio covers the mortgage interest, and creates an annual income of c€800,000, depending on the performance of the underlying investments.
Loan: €25,020,000
Of which invested: €19,500,000
Mortgage Rate: 2.25% over LIBOR
Approximate Capital Growth: 7% PA
