Loan Type: Term Debt / Working Capital / Structured Trade Finance
Loan Amount: Term Debt A$100m, Working Capital A$30m, Trade Finance US$80m
- Client is a large, privately owned and diversified cotton producer with significant ginning and marketing operations.
- Client had all of their production funding with one financier, and all of their ginning and marketing financing with another.
- Client wanted to diversify their funding sources and obtain increased finance to fund growth and provide more liquidity in their marketing business, as well as additional facilities for hedging activities.
- Each business has a different ownership structure, so there was an imperative that the finance for each borrowing entity was non-recourse to the other
- Worked with the client to determine the facilities it required to fund its growth and what the structure of these facilities should look like.
- Developed detailed Terms Sheets for each borrower that would form the basis of the documentation structure for each finance package.
- Developed in conjunction with the client three financial models to produce a three way (P&L, Balance Sheet and Cashflow) forecast for their businesses.
- Prepared a detailed Funding Pack that outlined the businesses, their performance and funding requirements, together with all the relevant information a financier would require to evaluate the transactions.
- Together with the client, met with a range of financiers to present the transactions and gain indicative appetite for the financing.
- Worked with the financiers and the client to negotiate suitable finance arrangements, manage the transaction through the credit process and complete the complex documentation associated with putting these facilities in place.
- Successfully obtained suitable funding packages for each of the borrowers, with two financiers selected for the production business and three for the ginning/marketing business.
- Currently finalising documentation which is expected to close September 2019.
- New facilities will provide the clients with the capacity and flexibility they need to meet their growth needs and also diversify their funding base, thereby reducing their reliance risk on one financier for each business.
Loan Type: Supply Chain Finance
Loan Amount: $5 million
- Client was an established manufacturer and exporter.
- Having won two major new contracts with international clients, their incumbent bank was not prepared to support the funding required to support the opportunity.
- Client was concerned they could not to commit to work that would increase their turnover by 80%
- Working with the clients will built a detailed financial model and credit submission that highlighted the benefits associated with the new business opportunity
- Additionally it highlighted the strengths within the existing business that had not been identified by their bankers
- The clients had already made significant positive changes to the businesses to prepare for the additional workflow
- Approaches were made to key financiers who had a deep understanding of the industry and typical funding solutions.
- Two financiers indicated strong support for the client
- On review of the offers, one was selected for progression to full approval
- Structure will not only support the 80% of new business growth, but will also give additional scope to tender for additional works that further compliment the strategy
Real Estate Agency Refinance
Loan Type: Cash flow
Amount: $1.3 million
Key Outcomes: Rate reduction of 1.1%, improvements in transactional banking pricing, Director Guarantees removed
Commercial Property Finance
Property Trust Fund Manager
Loan Type: Commercial Property Finance
Amount: $12 million
Key Outcomes: Term certain facility with agreed benchmarks for automatic extension of term. Clear and workable covenants around WALE and Interest Cover that allow necessary flexibility to continue to improve quality and well located asset. Market competitive margins off known benchmarks and SWAP facility to enable appropriate interest rate risk management to be considered by Funds Manager (not mandated).
Retail Shopping Centre
Loan Type: Commercial Property Acquisition Facility
Amount: $12.0 million
Key Outcomes: Reasonable LVR for borrowing entity with 100% foreign shareholder with competitive pricing at less than 270 points over BBSY.
Loan Type: Asset Finance / Growth Funding
Loan Amount: $25 million
- Listed Mining Services client
- Client had a strong pipeline of new business and required committed facilities to enable it to confidently tender for new contracts.
- Financial profile was improving following strong growth over the previous 2-3 years, however, a view needed to be taken on forecast performance to support the increased funding requirement.
- Worked with the client to clearly articulate their financial model and substantiate its underlying assumptions.
- Developed appetite from a range of financiers to ensure all avenues were explored in the lead up to the funding requirement.
- Negotiated and agreed a range of covenants that provided the financier comfort that financial performance would meet expectations, whilst providing our client confidence that there was sufficient headroom in place.
- Assisted with the negotiation of documentation to ensure the terms and conditions met the client’s ongoing operating requirements.
- Achieved funding in two tranches, one revolving tranche for $10.0m for finance for new fleet for existing operations and the second, non-revolving tranche to support equipment needs associated with new contract wins.
- Facilities provided the business sufficient capital to purchase / build new equipment and tender for new contracts.
- Client has since deployed newly built equipment into existing sites and successfully tendered and won new contracts and financed equipment to meet this growth.
- Financial performance has exceeded forecasts, the business is performing strongly and has continued growth aspirations
Loan Type: Equipment Loan
Amount: $3.4 million
Key Outcomes: Equipment required for an existing client for interstate expansion fully debt funded over 5 years (40% balloon) and a 6 month P&I “holiday” (aligned to cash flow forecasts)
Business Acquisition Finance
Loan Type: Asset Finance/Bridge Facility
Amount: $5.0 million
Key Outcomes: Avoided client needing to raise equity for an acquisition by utilising existing assets as security for a new facility. Resulted in a material improvement in revenue and EBITDA and was achieved in a climate where funding to mining services companies was challenging. Business is now well placed for further expansion.
Working Capital Finance
Loan Type: Debtor Finance
Amount: $9.0 million
Key Outcomes: Client was initially seeking a working capital facility of $5.0m to refinance an existing Overdraft and provide headroom for growth. Following a process across eight financiers we reduced this list to only those who had a strong appetite for the transaction. The successful financier not only provided an additional $4.0m in headroom but also agreed to a “security light” package, matched by a very competitive pricing outcome for the client.
Property Purchase and Development
Childcare Property Development
Loan Type: Childcare Centre Construction Finance
Amount: $3.5 million
Key Outcomes: Bank funding at 60% LVR against As If Complete Value of a proposed new childcare centre on a greenfield site for a first-time developer childcare operator. Competitive pricing less than 330 points over BBSY including line fee for construction finance. Investment loan is also approved as part of funding solution to continue supporting the childcare operation post construction, with further pricing reduction once converted.
Loan Type: Bank Guarantee Facility
Amount: $7.9 million
Key Outcomes: Reduced cash cover requirement from 100% with incumbent bank to 50% through introducing Government Agency involvement, enabling the client to maintain cash in their business.