After a long summer with little activity lenders remain hungry for new business, despite Brexit.
Senior loans at lower leverage and whole loans at higher leverage (up to 85%) are available in the market, subject of course to the property and sponsor fundamentals. Higher LTV’s are achievable for the right deal on a preferred equity basis linked to higher pricing and/or JV agreements. In today’s market there is a lender out there for every deal, at a price.
Senior loan pricing has come down in recent months, but higher leverage loan pricing has increased. Many of the alternative debt lenders have broadened their product offering and on some deals are even competing with the UK clearers and life companies. The Pfrandbrief banks remain the most competitive lenders in the UK senior debt space but they are very much focused on property location and covenant strength.
A further rise in interest rate is considered likely and therefore there is a trend towards fixed rate loans, although floating with a cap rate remains available.
