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Castle Trust Bank completes £9.6m hybrid loan

01 March 2021

Castle Trust Bank has completed a £9.6m development exit loan, structuring a hybrid solution that combines a serviced loan and a bridge.

The specialist lender worked together with Sirius Property Finance to complete the transaction which will enable the client to sell a proportion of the properties and retain the rest to let to tenants.

The £9.6m loan has been secured on a block of 69 one- and two-bedroom apartments in a five-storey commercial to residential conversion in Birmingham. Constructed under permitted development, the scheme in Four Oaks, Sutton Coldfield has been valued at £13.2m and the LTV was 73%.

The loan provided by Castle Trust Bank is split at the outset between a bridging loan on the properties that are being marketed for sale and a five-year fixed rate loan with serviced interest on those that are being retained to let out. After nine months, the bridging loan will also convert to a serviced loan, enabling the client the flexibility to choose whether to deleverage at this stage or to service the debt.

Rob Oliver, Sales Director at Castle Trust Bank, said: “This case is an excellent example of the type of bespoke deal we are able to structure at Castle Trust Bank. The client wanted the flexibility to sell some of the units but also a sustainable solution that would allow them to retain the majority of the units for ongoing income. We worked together with the team at Sirius to deliver this solution, which gives the client the surety of a Buy to Let loan and the flexibility to deleverage when some of the units are sold – and all at a very competitive rate.”

Nicholas Christofi, Managing Director at Sirius Property Finance, said: “It’s always a pleasure to work together with a lender on a deal like this, which is structured to give a client exactly what they need. Castle Trust Bank weren’t put off by the large loan size or complex nature of the requirements and worked in partnership with our team to deliver an excellent solution for our client.”