Case study - Participation loan
A private lender located in Edmonton, Alberta contacted C.A. Bancorp Realty Finance requesting loan participation on a single asset transaction involving a condominium conversion project.
The private lender, who had provided financing to the borrower in the past, was unable to fund the full portion of the borrower’s current request. The loan facility was to assist the borrower with the acquisition and renovation of a 21 suite apartment building in Edmonton, Alberta. Upon acquisition, it was the borrower’s intention to obtain strata title, complete suite renovations and list the individual condominium units for resale. The local economic conditions, personal covenants and past conversion experience further supported the investor’s intentions.
To assist the local firm in funding the loan, C.A.B. Realty Finance L.P. entered into a co-lending agreement, on a pari passu basis, for a term of 13 months. The loan was fully secured by the underlying real property along with the full personal guarantees of the principals. The loan is to be repaid upon successful closing of the individual units.