Refinancing Project
Business Challenges
A syndicate of Irish investors acquired a €9 million mixed-use commercial property in Bavaria. Farrelly & Mitchell was asked to examine ways in which investors could refinance their investment on more favourable terms.Our Approach
The syndicate had originally been funded by a global bank in during the credit boom. When Farrelly & Mitchell approached the bank, they indicated that - even though the loan was low-risk and performing - they would be prepared to incentivise the syndicate to move their loan to another lender.Using its detailed local knowledge of the market, Farrelly & Mitchell identified a Germany-based bank which was interested in lending money to the syndicate. Farrelly & Mitchell’s big advantage was the fact that it has seasoned German-speaking property professionals, with local knowledge, to carry out its negotiations. This advantage was important during hard bargaining - over loan-to-value ratios, covenants and the finer details of leases – when the discussions took place in German.
Benefits & Value
Farrelly & Mitchell worked with the original lender and negotiated to achieve a €1 million write-off of principal.It also negotiated with the local lender to arrange loan terms which were comparable to the loan-to-value ratios and interest margins that the international lender had given out during the credit boom.
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