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Case Study

Preferred Equity Bridging Facility

About

$6M Bridging Arrangement

Challenges

Our client wanted to roll over profit and equity from a development in Queensland that was intended to partly fund a new acquisition.

Due to unforeseen circumstances, a delay in that project resulted in a mismatch in timing. That meant that settlement of the acquisition could not be extended so the client needed to arrange a solution to bridge the gap within a short time frame.

Solution

Ocian secured a non-bank Preferred Equity Facility.

Results

As a result of securing the bridging facility, the funding allowed the client to settle on their new acquisition before completing their existing project.

A big win for the client was that the new financier did not require a security interest over either the development project or the new acquisition. This gave the client peace of mind without having to be restricted by the timeline of completion of the existing development.

The client was able to complete the existing development without renegotiating their existing finance arrangements. Alongside this, they were also able to access a senior debt facility to support the new acquisition.

The facility gave the client the option of converting to a lower cost and long-term Residual Stock Facility once the development facility was repaid.

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