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31 October 2007
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Adapting to the Current Market
Hi John,
In my last GLOBAL VIEW I talked about how funds in the non-bank lending markets here had dried up with many financiers having severely reduced – or even stopped – lending. To see the article GLOBAL VIEW, CTRL + click here http://www.globalpacific.co.nz/newsletterarchives/October2007/tabid/4696/Default.aspx
Well things have picked up since then and we’re now getting more non-bank lenders telling us they have funds available.
There are some major differences though.
- Lenders are being far more selective as to the loan requests they will look at or approve.
- Lending ratios are becoming less important than servicing ability and certainty of repayment.
- Those who are lending have become a moving target. A financier with funds this week may have none the next.
I’d say the major issue to sort out when presenting a proposal is the financier’s exit strategy from projects like developments or subdivision. Banks have always wanted pre-sales to cover their loan – and more. But now second tier lenders are also looking for additional cover rather being left with the residual debt levels they were happy with in the past.
In this respect we have contact with underwriters quite acceptable to first tier lenders. So if you’re looking for those last few pre-sales to secure your development funding give me a call.
This “credit crunch” has however brought up other opportunities. Some ventures that would have used debt finance previously now need to look at other alternatives, like joint ventures.
We have some excellent opportunities for equity or quasi-equity participation in developments, subdivisions, and commercial, industrial and residential investments. The method of participation is open in most cases and is subject to negotiation. If you’re interested give me a call.
In my September GLOBAL VIEW I offered to send the definition of “Eligible Persons” who are able to receive offers of Private Placements – being investment opportunities that do not require a prospectus. If you’d like a copy of this definition please phone me or respond to this email and I’ll send it to you
Cheers
JP
John Paine
Global Pacific Corporation Limited
112 Gladstone Road, Parnell,
P O Box 3229, Auckland, New Zealand
Phone +64 9 303 3700, Fax +64 9 303 3031
Mobile +64 21 902 004
Email john.paine@globalpacific.co.nz
Web site www.globalpacific.co.nz
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