Malahide Development, Ireland - Mezzanine Loan Investment
Status: Closed 2007

Investor Benefits

• Minimum Investment €250,000
• Total Mezzanine loan raised €3m
• 20% coupon rate paid at maturity
• Loan term expected to be 26 months
• Loan secured as second charge on land valued at €14m (before planning)
• Loan also covered by personal guarantee of two of the principles with high net worth
• Deal structured so that returns are taxed as CGT not Income tax

Prime Wealth Management has been retained by Walsh Maguire & Co., a leading Irish developer in business since 1982, to raise €3,000,000 by way of loan stock to fund a new development opportunity in Malahide. This is an excellent opportunity for investors to generate a large couple rate return of 20% per annum. A minimum investment amount per investor is set at €250,000.

The loan stock will accumulate a coupon of 20% p.a. payable at maturity and is secured as the 2nd ranking charge on the site behind a loan from AIB loan of €9.425m and personal guarantees from 2 of the main principals, Liam Moran and Vincent Maguire. The site is approximately 4 acres, is zoned residential and there is a current valuation from Kevin Flanigan Estates of €14 million before full planning permission is obtained and €19 million if planning is granted for the requested 15 sites.

KPMG have provided a tax opinion and have suggest that provided the Loan Stock is held for at least 24 months, then interest would be taxed at the Capital Gains Tax rate (currently 20%). The Promoters along with parties on neighbouring sites have commissioned a Local Area Plan (LAP) which they hope to have agreed with Fingal County Council by the end of 2007. The Promoters intend to commence construction of 15 houses on the site by July 2009. Repayment of the loan is expected to occur within 26 months.