Bridge loan to close a time-sensitive industrial purchase
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Catalyst Private Credit > Real Estate Lending > Bridge loan to close a time-sensitive industrial purchase
The situation
A growing oilfield services company in Nisku had leased its shop and yard for eight years. The landlord decided to sell, and the company had a right of first refusal with a 45-day window. The company's bank supported the purchase but could not complete its approval and documentation inside the window.
The structure
Catalyst advanced a first mortgage bridge on the property, secured by the real estate and a general security agreement, with interest prepaid from the loan proceeds for the first six months. The structure allowed the company to exercise its right of first refusal without diverting working capital.
The outcome
The company acquired the property and refinanced with its bank five months later at conventional pricing. Owning the facility has since allowed it to expand the shop without landlord approval.
Key terms
- Facility: first mortgage bridge with general security agreement
- Term: 6 months, repaid in month five
- Security: industrial shop and yard, Nisku
- Exit: conventional bank refinance
Why it worked
What made this financing straightforward to approve and fund:
- A right of first refusal with a hard deadline the bank could not meet
- Prepaid interest preserved the company's working capital
- Bank support for the takeout was confirmed before funding
- Owner-occupied real estate with strong operating cash flow
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Solution:
Oilfield services company -
Funded:
August 12, 2024 -
Sector:
Real Estate Lending -
Term:
6 months -
Share:
Representative financings we have structured and funded.
Have a transaction that needs certainty and speed? Talk to the Catalyst credit team about how we would structure it.
