Real Estate Financing

Transcription

1 Real Estate Financing Typical Structures & Negotiating Term Sheets This course is presented in London on: 05 February 2018, 04 June 2018, 08 October 2018 The Banking and Corporate Finance Training Specialist

2 Course Objectives Participants will: Be introduced to the methods of investing in real estate Understand the difference financing structures such as those involved with REITs, Opco/Propco and Islamic Finance Get an overview of the LMA Term Sheet (Real Estate Specific). Have explained to them the property due diligence including issues warranties, indemnities Course and Overview disclosure. Learn about covenant of title including full title and limited title guarantees. Be appraised of the loan portfolio sale and the bidding process. Be taught about the exit strategies and bridge take-out. Background of the trainer Trained as a lawyer, the trainer has over 19 years experience in international banking and structured finance transactions, including real estate finance, loans, leverage finance, debt capital markets, securitisation, structured products, repos, derivatives and financial regulatory and compliance. She has been actively involved in the creation of innovative award winning structured transactions and negotiating complex financings. She has advised global institutions such as Credit Suisse, Citigroup and Goldman Sachs and spent many years practicing law at Allen & Overy LLP, Linklaters and Sidley Austin Brown & Wood in multiple jurisdictions including London, New York, Hong Kong, Singapore etc. She holds a Law LL.B (Hons) degree from University College London and has worked in the Finance Know-how team at Clifford Chance. She is an author and now runs her own business advisory, training and legal consultancy. Course Content Methods of Investing in Real Estate Real Estate Investment Structures Types of Finance The Lending Structure Investment Finance Structure & Key Features Security Package & Guarantees Drawdown, Repayment & Prepayment Interest Bank accounts Development Finance Structure & Key Features Security Package Collateral Warranties and Guarantees Drawdown, Repayment & Prepayment Interest Bank accounts Flexible Financing Arrangements

3 Islamic Finance Structures Sale and Leaseback Opco/Propco Structures Ring fencing Syndication Bridge take-out REITs Form of a UK REIT The conditions Breach Ringfence Property Rental Business Tax treatment Property Derivatives Term Sheets What is a Term Sheet Reasons for having a Term Sheet Process and Timing Duty to negotiate in good faith Case law Binding terms Negotiation Guidelines Borrower's perspective Lender's perspective General points to bear in mind LMA Term Sheet- Real Estate Specific Section 1 Senior Facility Terms Security Repayment, Prepayment & Cancellation Bank Accounts Representations & Warranties Undertakings Events of Default Conditions Precedent Section 2 Mezzanine Facility Terms Bank Accounts Cross Defaults Costs and Expenses Section 3 Intercreditor Agreement Terms Security Ranking Payments & Cure Periods Security Enforcement Waterfall Group Case Study: Participants will work together to negotiate the terms of financing and a term sheet for a real estate finance transaction. Groups will be

4 assigned different roles e.g. banker, sponsor, lender, seller). What's the best deal you can negotiate? Property Due Diligence Purpose Scope Materiality Investigation of Title Certificate of Title Warranties, Indemnities & Disclosure Due Diligence Questionnaire Due Diligence Report Covenant of Title Full Title Guarantees Limited Title Guarantees Subject to and actual knowledge Loan Portfolio Sale The Bidding Process Commitment Letters Highly Interested/Confident Letters Due Diligence Documents Negotiations MAC clause Market Flex clause Clear Market provision Reliance Letters Legal Opinions Reports and Audits Timeline Acquiring Distressed Portfolios Exit Strategies/Bridge Take-out Syndication Securitisation Course Summary This course covers the various methods of investing in Real Estate Finance including the various structures used and negotiating the term sheet including discussions relating to property due diligence. It then covers the bidding process and issues to consider relating to leveraged deals, large loan portfolio sales and/or acquisition of distressed assets including exit strategies and/or bridge take-outs. It is relevant for in-house lawyers and private practice lawyers alike and bankers involved in complex structuring involving real estate finance, leverage finance or acquisition finance, securitisation particularly CMBS, lending/banking documentation teams, structurers, commercial real estate origination teams including originators, the sales

5 team, commercial real estate investors and borrowers as well as accountants who advise clients on real estate finance transactions or structured transactions with an element of commercial real estate finance. Whilst this is not a fully fledged course on Leverage Finance or Acquisition Finance, this course is relevant to in-house lawyers and private practice lawyers, investment bankers, private equity houses, investors, commercial banks, wealth fund managers and hedge funds involved in loan portfolio sales backed by commercial real estate including sale and purchase of distressed assets. We start off this course setting the scene by discussing the various methods of investing in real estate finance and go on to cover the various typical structures including the key features of the Opco/Propco structure, REITs, Investment Finance and Development Finance. We discuss term sheets in general, the binding and non-binding terms and the points of negotiation from a lender's perspective, a borrower's perspective and some general points to bear in mind when drafting. We cover the key elements of a real estate finance LMA term sheet. Then we go through the property related issues around due diligence and covenant of title. For those of you likely to be involved in submission of bids for purchase of loan portfolios backed by real estate, we cover aspects of the bidding process in detail including commitment letters/mandate letters or the softer highly interest/confident letters, the heavily negotiated clauses and points, due diligence and the various documents and ancillary documents to be agreed. We map out the timeline and finish off this section by discussing distressed assets sale and acquisition. Additionally, we will cover the various exit strategies used for bridge finance take-out and/or to get further financing including full syndication, securitisation and tap issues to raise more financing. We will undertake an Interactive Group Case Study during this course whereby participants will be placed into various groups to negotiate the terms of financing and a term sheet for a real estate finance transaction. Complimentary materials will be provided to all participants. What Redcliffe s clients are saying about the course and our trainer Provides overview of Real Estate Financing Transactions, engaging speaker The trainer was great! 09:30-17:00 London Standard Price: VAT Membership Price: VAT Delivering this course in-house for you to a number of participants could be very cost effective.