23 Mar AGRICULTURAL FUNDING SUCCESS STORY 1 – MARCH 2022

Client Position:

An intergenerational family had agreed to a transaction that allowed one of the generational owner’s children purchase a major stake in the family farm.  The farm currently had a long-term lease in place to a third party which complication the valuation component for both the bank and the succession process.  The borrowers were career professionals with no direct historical farming experience or performance.  Prices for farmland were also moving quickly so speed to market was key in bedding down the transaction to prevent another reset.

RSP Outcome

RSP prepared and navigated the winning bank’s credit with regards to leased property and asset classes to achieve an unconditional approval and settlement at very competitive rates.  In addition, a material investment property portfolio was also refinanced as part of the successful outcome.  Since then, the farm values have increased conservatively another 25%.

Metrics

Purpose:                                            Farm purchase / succession

LVR:                                                    60%

Loan Amount:                                  $4.0m

Risk Rating:                                      Improving

Interest Rate:                                   2.27%

Lender:                                              Mainstream bank