Stretch Senior Debt Vehicle

Purpose

Significant demand exists to bridge the gap between equity and senior debt finance availability for real estate transactions. The SSDV intends to take advantage of an existing funding gap in the market, generate high quality fixed returns whilst benefiting from downside capital protection and offering an attractive risk/reward profile to investors.

The SSDV will also seek to provide mezzanine, bridge and equity joint venture proposals (where commercially feasible to do so).

Investment Opportunity

RYSE’s primary objective is to assist established and experienced developers with tightening liquidity or funding constraints experienced in general within the real estate sector. RYSE primarily provides stretched senior and bridge finance debt facilities.

Stretched senior debt is a loan secured by a first charge on the development site that removes the need for 2 lenders as a single loan is provided at above traditional gearing levels and with a "blended" rate of interest.

The amount of the loan is greater than provided by the traditional senior debt funders. The stretch also allows developers to diversify their equity across more projects.

Investment Process

  • Investors subscribe into the SSDV
  • The subscription is then deployed in the form of a loan/finance to the Borrowers/Developers
  • Developers use the financing to acquire/develop only the site agreed upon by the SSDV and the property consultant
  • The SSDV and its investors will benefit from a first charge on the underlying property or asset
  • Additional buffer is the equity element injected into the project by the developers (15-25%)
  • The SSDV will pay an annual dividend when a profit distribution is feasible
  • At maturity, the Borrowers will repay the loan with interest accrued