Equity Bridge Facility Agreement

September 19, 2021

Bridge loans roll the mortgages of two homes and give flexibility to the buyer while waiting for their old home to be sold. However, in most cases, lenders only offer surplus real estate loans worth 80% of the total value of both properties, which means that the borrower must have significant real estate capital in the original property or sufficient cash savings. In practice, the size of the credit varies considerably, ranging from €50 million to €500 million more. Lenders typically calculate the maximum amount of potential credit as a percentage of the liabilities of “eligible investors” (e.g. B 80% of aaa-rated investor commitments) subject to a haircut (e.g. B 20% generally applies to investors with a stake of more than 20% of total commitments). The cases in which an investor can be excused or transfer their commitment are therefore essential for the lender.

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