Receivables Monetisation Funding Solution for Real Estate-focused Sponsor (Lender)

  • Provided support on complex and time-intensive deal structuring

  • Proposed and developed a unique approach to execute the solution

  • Prepared a dynamic model for new and additional projects

  • Output used by the client to seek deal approval


CLIENT CHALLENGES
  • A real-estate-focused client was looking to fund an under-construction development project for a key relationship
  • Key challenges faced by the client were as follows:
    • The client was unable to fund the project owing to internal investment limit guidelines on single-party exposure
    • It wanted to propose a non-traditional deal structure to its Investment Committee
    • It suggested a receivable monetisation plan for the developer’s multiple projects to distribute counterparty risk
    • The client sought Acuity Knowledge Partners’ help to execute the proposed solution, as it wanted to proceed with the deal to maintain its relationship with the developer
OUR APPROACH
  • Acuity Knowledge Partners conducted a detailed white boarding session to understand the deal’s background and the funding solution to be executed
  • The cost outlay, receivable realisation, cost mismatch, debt requirement and paying capacity of each project and the cluster as a whole were analysed to evaluate the repayment capacity of the said projects under different scenarios
  • Key projects nearing completion and with a clear visibility on short-term cash flows were identified to mitigate completion and default risks
  • All-encompassing qualifying criteria were developed for individual receivable accounts and cash flows, deal covenants and coverage ratios were calculated under various stress scenarios for better visibility
  • The funding was structured with a defined sweep-based repayment by ring fencing cash flow releases of the projects identified
IMPACT DELIVERED
  • The analysis prepared by Acuity Knowledge Partners’ team provided flexibility to dynamically change the projects included, individual receivable accounts, credit assumptions, asset characteristics, etc., which helped finalise the structure
  • The team also helped with discussion materials, along with detailed analyses and industry research for the client to build a case for the proposed solution with both the internal and external stakeholders
  • With Acuity Knowledge Partners’ performing the required modelling and analyses on this time-consuming and complex deal, the client was able to structure the deal and run it with internal stakeholders and proceed with deal execution
Thank you for sharing your details

Your file will start downloading automatically

If it does not download within 1 minute,

Share this on

What we have done

Operating Model Validation for Leading Transport Finance Business in Europe
What we are proud of

>50%

savings in staffing costs

25%

increase in outreach

Valuations and Complex Modelling Support for Investment Banking Division of GCC-based Bank
What we are proud of

>50%

savings in staffing costs

25%

increase in outreach

Distressed Acquisition Support for APAC-based Investment Bank
What we are proud of

>50%

savings in staffing costs

25%

increase in outreach

Due Diligence on Prospective Target Engaged in QSR Business for EMEA-based Client
What we are proud of

>50%

savings in staffing costs

25%

increase in outreach