The lender provided a £3.3m second charge bridging loan to a property developer back in 2016, with the funds to be used to refurbish a hotel into dozens of apartments, with a swimming pool, spa and concierge service.
The development finance came from a government-backed agency, but Blackfinch said the structure was particularly complex, with an agreed element of the deal that sales proceeds from the apartments could be ‘recycled’ to fund ongoing build costs rather than reducing the debt.
On top of this, there were also difficulties with the build and uncertainty as a result of Brexit causing further complications.
Blackfinch said it worked with both parties to extend the loan until the borrower could refinance, once the more risky build stage was completed in the middle of last year.
In the second quarter of 2019 a new lender was found, with the borrower agreeing to repay all of their existing debt in two tranches.
Blackfinch’s legal team worked to structure the deal alongside the borrower, the agency and the new lender in order to get the refinance in place before the formal repayment date, with the loan eventually repaid in full and on time in the latter stages of last year.
John Hartigan, investment manager at Blackfinch Property, said that a “complex and careful” assessment was needed during the loan to ensure everyone was headed in the right direction, and welcomed the “seamless conclusion” to the development stage of the work.