Credit Order Example 1

A group of companies had started constructing a residential quarter near Munich comprising 500 apartments and parking spaces across an area of 35,000 square metres. They were looking for a more flexible financing facility to replace the existing equity arrangement in place with another lender.

Working closely with the companies involved in the project, we arranged a loan to redeem the existing debt on behalf of another lender. This loan can be repaid at any time without incurring an early repayment penalty. Full cash collateralisation is provided by the lender, with the funds invested in separate time deposit accounts.

In addition to the credit order and pledge agreement, the deposits are reduced and repaid to the credit order provider to the extent that the borrower in turn repays the loan drawdown.