| |
| Friday, July 30, 2010 |
| Borrower | A developer specializing in the remediation of environmentally contaminated properties. | |
| Loan | A one-year, interest only loan of $22.3 million at 11% | |
| Collateral | A first lien on the 996 acres of property in Santa Clarita, which had previously been used by an ordnance manufacturer. | |
| Guarantors | The loan is backed by an insurance policy issues by an insurance company rated A+ Superior by Best which will pay off the loan if the borrower defaults and if there is a pollution event (which they acknowledged already existed). This policy enabled us to charge the unusually low interest rate. | |
| Purpose | The borrower needed the cash in order to close on the purchase of the property. | |
| Exit strategy | The borrower expected to be able to clean up and sell certain parts of the property within the first year, and expected to pay off the loan with these proceeds. | |
| Outcome | One year's interest was paid in advance. On maturity of the loan the insurance company (after a short hesitation, and firing their underwriter) paid us $22.3 million. |
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