The loan criteria applied in respect of loans made using proceeds from the Fund (through Spinnaker Nominees) is as follows:
For development loans the requirements are similar with security also taken over presales and construction contracts, where the manager determines is necessary.
- Maximum loan amount: $15 million.
- Security: the standard security requirement will be:
- a) Registered first mortgage over residential and commercial properties in New Zealand metropolitan cities.
- b) First ranking General Security Agreement over the entity that owns the property (where the Manager determines this is necessary for credit purposes).
- c) Personal guarantee of the sponsor(s). Other relevant guarantees will be obtained where the Manager determines this is necessary for credit purposes.
- d) Assignment over material leases, fixtures, agreements etc. (where the Manager determines this is necessary for credit purposes).
- Maximum term: 24 months for each Loan.
- Maximum loan to valuation ratio: 75% including all interest and fees based on the market value of the property.
- Valuation: Property to be valued by a valuer approved by the Manager.
- Eligible property types: The Manager will lend on commercial, residential, industrial property and land. The Fund’s primary focus however is lending to develop affordable residential property in the Auckland region.
- Excluded borrowers: No lending to persons employed by Reesby & Co, RML, Spinnaker Nominees or Spinnaker Fund.
- Subordination of subsequent debt: Any subsequent debt/charges behind Spinnaker Nominees’ security are to be subordinated.
- Development loan advance conditions: For development loans, funds will only be advanced on a cost to complete basis.