Mezzanine Funding – Bridging Loan
Mezzanine Funding – Bridging Loan
CapitalGroup was approached by a developer who was undertaking a private plan change which would see the zoning of a large land block on the periphery of Auckland change from rural to residential.
Following approval of the private plan change, the developer would complete the development of residential lots with a full presale take out from a major building company. The developer required funding to bridge a timing difference between when the purchase of the land would be completed, and when the private plan change would be approved at which time funding from a local trading bank would be readily available.
CapitalGroup assisted the developer to complete the land settlement via a highly leveraged structure provided by First Mortgage Trust and a mezzanine loan from CapitalGroup.
Capital Group invested funds for the following reasons:
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01
The highly experienced development team with a strong track record of delivering projects.
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02
Extensive legal advice in respect of the private plan change process.
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03
Commitment from a trading bank to fund the development following approval of the private plan change.
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04
Strong development proposition for the property following the private plan change approval including presales and engagement of a contractor.
