Sam Beaumont, asset finance advisor at Arc & Co. (pictured), led and completed the transaction, which presented several notable challenges from both an asset and borrower perspective.
The property was subject to a six-month rolling lease, which offered almost no covenant or income security and significantly increased risk for the lender. The borrower operated through a complex tax structure, requiring enhanced due diligence and careful structuring throughout the process.
Despite the complexities and an extended underwriting process, Habib Bank demonstrated a pragmatic and flexible approach.
“Negotiations between the tenant and borrower were aggressive and took some time, but Habib was patient throughout the process and amended terms to reflect the changing position, which gave the borrower comfort but also flexibility on the details of the lease,” Beaumont said.
“Habib also worked with the client on background income to support the loan in lieu of tenant security. They took a cash lien up front to account for a potential vacancy period and were happy to consider other sources of income being accessible in a worst-case scenario.”
The loan was provided at 2.5% over base with a 55% loan-to-value ratio and a three-year term. Habib Bank offered the facility under its Islamic finance product with no early repayment charges.
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