£1 billion allocated exclusively to the UK property market.

4.75% p.a. including lender's margin "low start" interest rate (rising to 5.95% after 6 years). 30 year fixed interest loan with lender's only break after 6 years (without penalty).

Suitable securities:

• Quality residential investment portfolios
• Long term (25+ years) undoubted tenant commercial investments
• Quality well spread commercial portfolio, particularly retail
• Minimum loan £5 million - no maximum

Click here for more information including case studies and FAQs.

The rate is a function of the money market and can fluctate daily. The above is based on a fixing on 3 July 2007.

from 0.75% Over cost of swap (fixed) funds

This non-recourse mortgage has been structured for property investors who have quality properties let to undoubted tenants.

CLP have arranged commercial investment finance throughout Europe, including both senior and mezzanine debt.

The Combination Loan

Provides 90% loan to value on flagship investment properties even though the rental income would not normally service a loan to this level. We combine the strengths of two mortgage lenders to achieve this objective at a competitive blended margin.

There is strong demand for high loan to value gearing on flagship properties let to undoubted covenants.

With purchase yields of 6% plus for these trophy buildings the problem has been that the rent is unlikely to service a highly geared loan.

The main deciding factors for rent serviceability (apart from the rent) are:

1. The length of the tenant's lease? 

2. At lease end (or break) what residual property exposure will a lender consider?

The longer the lease and the higher the residual property exposure at lease end, the greater the loan that the rent can service.

And here has been the problem until CLP's "COMBINATION loan"

There are really two types of quality lenders who will consider these flagship properties:

Lender A: Who is comfortable in lending up to 90% of value but who is much more cautious on residual exposure risk (50% of vacant possession value or less).

Lender B: Who is comfortable with a high residual exposure risk (up to 70% of vacant possession value) but will only consider up to 80% loan to value.

 

The "COMBINATION loan" shares the mortgage between the two types of lenders at a blended interest rate margin from 90 basis points over cost of funds (maximum 1.1% over cost of funds).

In simple terms Lender A takes the high loan to value risk and Lender B takes the higher residual exposure risk.

• The relationship between the lenders is already in place

• The inter-creditor agreements have been approved (subject to commercial adaptation to meet a specific requirement) 

• The lenders have agreed to use the same valuers and solicitors with Lender A managing the loan so that from the borrowers' point of view, it is a "one-stop" relationship 

• And most importantly, loans have drawn down on this structure

Important criteria

• Modern state-of-the-art properties in prime locations 

• Investment grade tenants · Fully institutional FR and I leases with upward only rent reviews 

• Minimum loan size circa £7m - maximum circa £250m 

• The interest rate is fixed throughout the loan term

Maple
Provides higher borrowings (or greater cash on cash return) on portfolios or multi-lets with varying lease lengths. We achieve this by working with specialist property finance lenders who take a view on re-letting demand.

Derivative Plus
Provides immediate cash flow benefits on well let residential and commercial properties with contracted rental increases whether indexed or fixed. This means that the enhanced income can service a higher day one loan.

The "one stop" solution
CLP’s creative package puts together and introduces you to the appropriate providers to achieve a ‘one stop’ solution where it can be demonstrated that value can be added to the purchase over time.

A new market is emerging where core debt, mezzanine and equity are provided by the same lending institution.

It is directed at property companies with a substantial track record and whose objectives are to continue their expansion programme.

Key ingredients:

• A new 50/50 company is formed with the institution

• The institution allows their name to be used as a joint venture partner (which can enhance the reputation of the new company)

The lender provides:

• Core debts to circa 70%, loan to value

• Mezzanine of 15%

• Equity 15% provided, 7.5% by each party

The company's 7.5% equity can be provided by re-gearing from their existing property asset base.

• Minimum transaction size £10m - £15m, although the market is aimed at £50m+

• Unlike normal equity providers these institutions provide equity for the long term

• The sectors of the market include (but are not limited to) residential and commercial developers, hotels, nursing homes, day nurseries, property investment companies, sale and leasebacks, etc.

• The marketing is directed at established property companies who wish to grow further. For this reason, they will not consider one-off situations (CLP can consider these with other mezzanine and equity providers).