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A Henry Stewart Market Briefing

Borrowing Strategies
For 2004

Generating real returns in a world of rising interest rates

 

Chairman

David Witham
Formerly Head of Structured Property Finance
Bank of Scotland

Speakers

John Butler
UK Economist
HSBC

Paul Dittmann
Executive Director
Goldman Sachs

Rupert Kirby
Manager, Property Finance
Ahli United Bank (UK) PLC

Mark Lambert
Corporate Risk Director
Royal Bank of Scotland

Barry Osilaja
Vice President,
Debt & Structuring
Jones Lang LaSalle Corporate Finance

Christopher Sanger
Director, Tax
Deloitte & Touche LLP

Simon Wainwright
Director
JPW Peiser Wainwright

 

THE GLOBAL ECONOMY AND ITS INFLUENCE ON UK REAL ESTATE LENDING

  • Does “currency flexibility” signal a change of direction for the dollar, should we be concerned, and does it matter?
  • What are the current global influences on UK rates?
  • Are businesses and consumers over exposed to both long and short-term debt, and how will they react to rising interest rates?
  • What changes are afoot in the labour markets and the overall shape of the economy?
  • Has the Chancellor miscalculated, and what will be the impact for growth, tax, inflation and interest rates?

John Butler
UK Economist
HSBC

 

THE UK SENIOR DEBT LENDING MARKET

  • How many senior debt lenders are out there?
  • Which lenders are active in what sectors?
  • What are the typical LTVs and margins?
  • Current attitudes to amortisation and repayment holidays
  • Current levels of margins and fees

Barry Osilaja
Vice President, Debt & Structuring
Jones Lang LaSalle Corporate Finance

 

THE PROPERTY FINANCE MARKETS – A LENDER’S PERSPECTIVE

  • What are the new innovations in the market?
  • When does it make sense to use a securitisation lender?
    - How is securitisation impacting the lending market - spreads, amortisation and proceeds?
    - Are the traditional balance sheet lenders joining the securitisation bandwagon and why?
  • What impact will capital markets investors have on the sector?
  • What are typical investment loan terms?
  • How will the market look in the future?

Paul Dittmann
Executive Director
Goldman Sachs

 

MEZZANINE AND QUASI EQUITY

  • Is mezzanine debt or equity? Why it matters
  • Linking mezzanine with senior debt: is it just a higher LTV loan by another name?
  • Who are the providers, what is available, and on what terms?
  • Fees or profit share, which is more beneficial?
  • What are the margins, profit shares and costs?
  • Case studies and illustrative returns

Rupert Kirby
Manager, Property Finance
Ahli United Bank (UK) PLC

 

EQUITY

  • Raising equity - public offerings or private placement?
  • What is the impact of the FSA?
  • What is a management “promote”, and what are waterfall returns?
  • Lender, sponsor, promoter: what are the roles and who does what in the current market?
  • What should a private placement memorandum contain?
  • Who are the potential equity partners?
  • Who picks up the bill if it all goes wrong?

Simon Wainwright
Director
JPW Peiser Wainwright

 

HEDGING STRATEGY AND THE USE OF DERIVATIVES

  • What strategies should you adopt in the current interest rate environment?
  • Is hedging optional or mandatory?
  • Are “swaptions” a solution?
  • What other hedging instruments should you consider? Are they fairly priced, are they efficient?
  • Pricing the swap: what are current credit spreads?
  • Is it worth breaking a penal fixed rate position? What are the alternatives?
  • The impact of accounting standard FRS-13 and marking loans to market

Mark Lambert
Corporate Risk Director
Royal Bank of Scotland

 

TAXATION: WHAT CHANGES ARE TAKING PLACE AND HOW DO THEY IMPACT YOUR BORROWING STRATEGY?

  • What will be the likely changes in tax on holding structures and borrowing?
  • Is the UK likely to remain an offshore tax haven for the non-resident investor?
  • Structuring borrowing to minimise tax – avoiding the thin capitalisation rules
  • What can we expect from the UK’s new property investment market?
  • What is the impact of the money laundering legislation?
  • Stamp Duty – what avoidance mechanisms are left?

Christopher Sanger
Director, Tax
Deloitte & Touche LLP

 

PROPERTY COMPANIES –
A BORROWER’S PERSPECTIVE

  • A borrower’s current view on the market
  • Are the institutions becoming more competitive, or leaving the debt driven market alone?
  • Reducing residuals, falling LTVs: does it mean more equity and lower leveraged returns?
  • How is the property company’s borrowing strategy evolving to cope with the change in market conditions?
  • Are falling credit ratings impacting borrowing capability?
  • Where are the current opportunities?

Simon Wainwright
Director
JPW Peiser Wainwright