65% loan to value mortgage, 9 million pound property, SPV borrower

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Key Facts 

• Equity release 
• Property value – £9,000,000 
• Mortgage amount – £5,850,000 
• LTV – 65% 
• Legal owner – offshore SPV 
• Client – Bangladeshi national, UK resident 
• 2.25% + BoE base rate, 5 years interest only 
• No AUM   

Our client is a successful hedge fund manager with unpredictable income streams and a complex portfolio of personal assets. The client’s personal assets include real estate, numerous un-listed investments, and various cryptocurrencies.  

The client owns prime real estate in London valued at £9,000,000. The property is let to a third party at a market rent. The client was looking to re-finance the existing debt on the property to raise funds for deployment elsewhere. The historically cheap cost of capital means that leveraging prime real estate and putting funds to work in a sector that generates higher returns than the borrowing costs is an attractive option for wealthy individuals. 

The sheer number of personal assets and the difficulty in valuing some of the more obscure investments meant that this transaction was never going to sit well with a high-street bank. After discussions, we settled on a private bank with a presence in Jersey. The bank was willing to accept a detailed letter from the client’s accountant setting out the value of each personal investment and certifying the income earned over a period of time, and the income expected to be earned in the coming years. 

With the property being held in an SPV, there were lots of people involved in the transaction (bank, legal advisors, accountant, corporate service provider), which was managed by Enness’ office in Jersey. As a result, following a coordinated effort from all involved, the loan was completed in good time. 

Above all, the complexity of the transaction evidences what is achievable when at first glance it appears difficult to source a solution.