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| Friday, July 30, 2010 |
| Borrower | A special purpose entity set up for this development | |
| Loan | $8,500,000 for three years at 12% in the first year, 15% the second and $18% the third year. | |
| Collateral | 1,136 acres of land zoned as agricultural near Sebring, FL. The land has been used as a sod farm, but will be subdivided into 10-acre ranchettes and sold to residents of Miami-Dade who want a place in the country. | |
| Guarantors | The principals of the borrower, who are Florida-based developers. | |
| Purpose | To acquire the land and carry out the subdivision. We provided $4.5 million at the closing, and the borrower put up another $4.5 million, both to fund the land acquisition. We will advance the further $4 million in stages when the necessary approvals, plans, budgets, etc. are in place to our satisfaction, and we are persuaded that the collateral as improved will have sufficient value to justify the advance. | |
| Exit strategy | The borrower proposes to repay us out of the proceeds of sale of ranchettes | |
| Outcome | The loan is in default. |
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