No existing income

Modelling
required

Maximum returns sought

Highest LTV
possible

Low yielding asset

Maximised IRR
achieved

Play the video

Hedge fund making first agricultural acquisition in the UK

No established business, so analysis and modelling to demonstrate serviceability was vital

The deal

Assets

  • Two farms in mid-England
  • 975 acres of land
  • Property but no operating business

Security

  • First charge over both assets

Income

  • No existing income
  • Detailed modelling around both farming and rental incomes projected

Requirements

  • Proven maximisation of IRR versus different pricing metrics
  • Maximum LTV sought to maximise returns

Challenges

  • Yields in agriculture are low
  • Value in potential businesses had to be proven
  • Senior debt only

Facility Secured

  • 60% LTV
  • Amortisation sculpted in line with business projections according to asset sales

Summary

Our client was a hedge fund acquiring two farms in mid-England. Neither had an established business or existing income. The planned businesses had to be modelled, including sensitisation, demonstrating how the loan would be serviced and then amortised over time.

Despite recent growth in the agricultural market, yields remain notoriously low. In seeking maximum LTV, but at an efficient cost, our client settled on 60% LTV option sourced.

How can we help?



Subscribe me to your mailing list

Want the details?

Colliers International Structured Finance
Second Floor, Weighbridge House, Liberation Place, St.Helier, JE2 3NA, Jersey.

Subscribe to Colliers news and events