- Dean & Reddyhoff (D&R) owns and operates a portfolio of marinas located on the South Coast of England.
- The firm was acquired by a new shareholder group in 2015 by means of a rescue financing funded by junior notes. Senior debt was raised shortly after.
- Chatham was mandated to obtain competitive loan terms to refinance some of the junior notes and existing senior debt.
The request was for:
- Senior debt corresponding to 60% LTV – secured by the portfolio of marinas.
- 5+ year term funding allowing flexibility for an exit.
- Ability to distribute cash to the parent.
- After reviewing the existing portfolio of assets and understanding the client’s strategy going forward, Chatham together with D&R and the new shareholder group identified the key features required for this transaction.
- Chatham presented the proposal to a small number of carefully selected potential lenders and invited them to provide their best funding offers.
- Chatham advised D&R on the preferred set of terms by leading term sheet drafting and negotiation.
- Chatham then liaised between D&R and the preferred lender until reaching final credit approval. We also assisted with legal documentation from first draft to financial close.
- Chatham’s advice extended to the unwind of the existing hedging position and to the set up of a new hedging strategy.
- Achieved highly competitive and flexible terms due to our ability to benchmark offers and access lenders which have appetite for this type of asset.
- Chatham successfully marketed the transaction as a Real Estate financing piece eliminating the requirements for leverage restrictions and instead focusing on LTV for debt sizing.
- This allowed D&R to increase its borrowing capability from £16m to £30m while maintaining healthy ICRs and achieving ND/EBITDA of 8.3x.
- The financing closed with a 7y tenor, exceeding initial expectations of a 5y with limited back ended amortisation.
- Flexibility to allow the shareholder group to exit without punitive prepayment fees or onerous breakage costs.