Real Estate Debt Financing, Structuring & Negotiation

Course Overview The traditional Mortgage is a loan whose proceeds have been used to allow an investor to purchase a property. The amount and interest rate of the loan is determined by the open market value of the property, the amount and quality of the cash flow, the term of the financing and the seniority of the lenders claim against the property. The courses uses this as a starting point and quickly expands into a deeper view of real estate debt financing. Debt can also be structured for the financial buyer or opportunity fund (mezzanine debt) borrower that seeks a high loan to value ratio. Many property investors move between corporate and asset financing for their properties or might use multiple financing sources on one deal depending on market appetite for each type of paper. Large, complex debt transactions are often shared my multiple players forming syndicates. The second part of the course addresses the complexity of these transactions and helps to understand the agreements and investment goals between the different parties. The third part deepens the knowledge of loan workout strategies and re-structuring in difficult situations even further and expands into the enforcement and insolvency processes in Europe. Attend this intensive and highly practical 3–day training course and learn the best practice techniques in: The Investment Business Plans: Establishing Investor objectives. How should the deal be structured? Cash Flow analysis: Testing assumptions on income growth, operating expenditure and exit strategy Financial restructuring: Joint Ventures, equity partners and profit sharing arrangements Structuring and reviewing the cash flow through revised business plans, risk analysis and stress testing Due Diligence process Key Financial Covenants – pricing & risk mitigation Problem loans and workout strategies: the warning signals & current market problems and alternative workout strategies Risk analysis: What can be done? What is practical? Who should attend? This course has been specifically designed for the benefit of: Real Estate Debt Managers Real Estate Analysts Real Estate Credit Managers and Credit Risk Analysts Asset Managers Risk Managers Real Estate Investors Private Equity Pension Funds Fund Managers Lawyers Accountants Why not recommend this course to a colleague?
Day 1 Loan structuring: underwriting and risk mitigation Investment business plans: establishing investor objectives. How should the deal be structured? Cash flow analysis: understand the impact of key real estate variables on the debt cash flow Identifying and quantifying the risks in the loan Alternative opportunities to raise and structure finance Using alternative debt structures Key financial covenants - pricing & risk mitigation Evaluate cash flow waterfall priorities and other structural protection Allocating risk & returns Exercises: cash flow analysis using excel to structure debt and calculate key financial ratios Day 2 Loan structuring: Facility agreements and negotiation Objectives when taking security Types of security and security packages in real estate finance Typical financial covenants and points for negotiation Negotiation terms sheets and intercreditor agreements Pitfalls when negotiating intercreditor and loan agreements, what mistakes not to make Due diligence process – property level Priority of competing security interests Case study: write a terms for a sample financing, discuss loan agreement Day 3 Loan structuring: workout strategies and enforcement Preparing for the recovery? Importance of communication. What should you look for? What are the alternative strategies? Steps for taking control of the asset from a lenders perspective Workout through administration or LPA receivership Determining the legal jurisdiction The importance of legal opinions Understanding loan enforcement options in Germany and UK Alternative work-out strategies in Europe Case study: Plan workout strategy for a sample case Course summary and close