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Case Study

Restructure of Investment Facilities

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Restructure of a $100M Senior Debt facility

Challenges

There is no doubt the impact of the pandemic has been devastating for businesses across Australia. Our client is a long-term owner of a portfolio of shopping centres and required assistance in restructuring their senior debt facility.

The background of this is that tenants who had been impacted by Health Orders related to COVID-19 were forced into temporary closures and were seeking financial support from our client.

In unprecedented situations such as this, it was important for the client to protect their relationships with quality tenants. They had decided to provide widespread rental abatements before a formal code had been established for the sector.

What this meant was the resultant income reduction would have a significant impact on the group’s ability to meet financial covenants under its Senior Debt facilities over the next 12 months. Those abatements, coupled with low transaction levels and significant economic uncertainty, also posed a risk of inaccurate revaluations.

Solution

Ocian assisted with temporary amendments to the existing Senior Debt facility, changes to reporting, and advised on further long-term restructuring.

Results

Our approach and experience in finance empowered us to secure the financier’s consent to our client’s abatement strategy. Ocian also secured temporary relief from financial covenants and a delay in undertaking periodic revaluations.

Additionally, over that period Ocian prepared additional reporting for the financier in terms of both depth of analysis and regularity. We subsequently provided advice on a broader restructuring of the client’s Senior Debt facilities.

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