Real Estate Debt Structures and Financial Modelling Course

This course is aimed at financial analysts working for banks, real estate consultancies and property consultancies seeking a best practice approach to building robust real estate debt models.

Delegates will learn to construct a discounted cash flow model for senior debt and mezzanine finance for the investment and lending decisions. Delegates will also learn credit fundamentals which will enhance their property lending analysis and underwriting processes.

Content

• Sources of Funds & Lending Criteria
• Insurance companies and pension funds
• High street and corporate banks
• Debt funds and public markets
• Mezzanine finance houses
• Debt Covenants & Calculations
• Operational Covenants: asset maintenance, disclosure requirements, insurance and credit line
• Financial Covenants: interest cover ratio, debt service coverage, loan to value
• Senior Debt Financial Modelling
• Debt Modelling
• Interest Only
• Constant Amortisation
• Constant Repayment
• Rolled-Up Interest
• Cash Sweep
• Cash Trap
• Revolving Facilities
• Case study: office building debt lending in the UK (I)

• Development finance
• Mezzanine finance
• Modelling mezzanine structures
• Overview of inter-creditor agreements
• Mezzanine interest and fees
• Debt Prioritisation
• Modelling cash flow waterfall
• Coupon and capital repayment schedule and prioritisation
• Maximum loan amount
• Credit Analysis
• Stress test
• Capital adequacy calculations

Training Methodology

The training methodology combines lectures, discussions, group exercises and illustrations. Participants will gain both theoretical and practical knowledge of the topics. The emphasis is on the practical application of the topics and as a result participant will go back to the workplace with both the ability and the confidence to apply the techniques learned to their duties.