The security was still pledged to the lender being repaid.

The situation

A residential developer had reached a one-time settlement with its incumbent lender but had no capital to complete construction. Towers were topped out and sold down; the remainder had not started. The settlement had a date, and missing it would have reopened the entire exposure.

The complexity

The security was already charged to the settling lender until the settlement completed, so the incoming capital had to be committed against a release that had not yet happened. The developer's other projects could not be brought into the security package without exposing the whole balance sheet to a single construction programme.

The structure

Capital was deployed through an alternative investment fund into a ring-fenced special purpose vehicle holding the remaining towers and the buyer receivable book against them. Disbursal was set against certified construction milestones rather than released in a lump sum. The release mechanics with the settling lender were documented before the term sheet was signed, which is the stage at which facilities of this shape usually fail.

The outcome

The settlement completed on its date, construction restarted, and the incoming lender's exposure was confined to one certified programme rather than to the developer's balance sheet.

Described generically. Client identity, counterparty and transaction terms are confidential.