Referring Randal
You’ve identified an opportunity to refer Randal to a Global Markets Specialist. Let’s look at how the story unfolds from here.
You’ve identified an opportunity to refer Randal to a Global Markets Specialist. Let’s look at how the story unfolds from here.
Once an opportunity has been identified, contact either your local Global Markets Specialist or the Commercial Interest Rate Desk in Sydney.
Have the relevant loan details ready when you make contact. This will allow the Global Markets Specialist to assist your client quickly and seamlessly.
Once Randal Rural Properties Pty Ltd had been referred to James, the Global Markets Specialist, they had a conversation to further assess the needs.
It became apparent that Randal Rural Properties Pty Ltd were looking to sell some current properties in the next fifteen months to pay down $2m of their debt.
While they had the need for interest cost certainty, they also needed flexibility to accommodate the potential sale and the repayment of debt.
James was able to provide a range of solutions, and Randal agreed that the Combo solution on the total debt of $4m was the most suitable to meet the business’ needs.
The Combo was a five-year Fixed rate on $2m of 2.75% with interest only repayments, quarterly rollovers, and a Variable Market Rate on $2m, also interest only with quarterly rollovers currently at 1.83%pa.
The Combo solution combines a Fixed Rate and a Variable Market Rate, and splits the loan into two portions:
1) Fixed and
2) Variable.
It provides a single loan balance (the ‘Combined Loan’) resetting at the weighted average rate. The Fixed portion can have scheduled reductions, and the principal can be repaid ahead of schedule on the Variable portion.
Randal Rural Properties was happy with this solution. They were able to achieve certainty in their interest costs on a portion of their debt while maintaining the flexibility they required.
For a more detailed description of the Combo Solution, including benefits, costs and risks, click the ‘Combo Solution’ button.