ALTINEL | Pioneer of Yachting & Shipping

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YACHT FINANCE

EXPERTISE

Altinel has experience to meet the financial planning needs of individuals and professionals involved in high-end asset optimization and finance. Our role is to provide accurate, timely, high quality analysis and advice based on the use of a comprehensive and unique range of efficient financial products.

Altinel provides additional support to family offices, corporations, lenders and professionals involved in yachting. Our solutions are tailored: (i) to ease decision making and adopt the right path during purchase and construction transactions; (ii) to implement or enhance project and cost management strategies.

Why work with us? The economic climate has evolved over the last years with many new regulations, significant constraints from the banking sector and new market strategies. Our team will provide the right analysis tools to make the right decision. For instance, it became very challenging to manage the constant changes of the financial providers’ policies, sometimes made regardless of market needs. Only a few experienced professionals have the capability to anticipate and understand the economic developments, to match all parties’ requirements and offer efficient solutions. This is precisely what Altinel is about.

FINANCING YACHT CONSTRUCTION

Our mission is to work hand in hand with the owner and shipyard, to draft a structuring proposal for the lender’s attention, focusing on both:

  • Pre-delivery finance package;
  • Post-delivery terms and conditions.

Construction of large units can take up to 4 years and lenders are sometimes reluctant to be assigned a contract at early stages of construction, unless they are granted the adequate level of security. Thus, it is essential to draft, for the lender’s attention:

  • A thorough analysis of the Construction Contract, read with the lender’s perspective in mind.
  • When possible, draft the Construction Contract to match lending constraints.
  • A detailed quantitative assessment of potential guarantees related to the construction contract: financial guarantee, bank guarantee, and mortgage over the yacht in build or pre-owned assets such as other yachts or property etc. In some cases, it is possible to achieve advantageous combinations of equity release and construction finance that allows lender to feel secured during long construction terms.

The purpose is to obtain approval with the best terms, by Downsizing construction risk for the lender and mitigating any potential risk, while maintaining a cost-efficient product at an acceptable level of guarantees.

We structure the financing proposal taking into consideration:

  • Provisional cash-flow of the client;
  • Schedule of draw-downs during construction and related risk ratio at each stage;
  • The possibility for the client to sell the yacht soon after delivery without penalty, or to resell the Construction Project before completion at reduced cost;

Lenders’ risk appetite and previous experience in construction finance.

PRE-OWNED YACHTS ACQUISITION FINANCE & EQUITY RELEASE

When addressing the right providers, owners and buyers can benefit from favorable lending conditions available on the market today.

Hence, financing the acquisition cost or arranging an equity release on a fully paid yacht at the moment of her acquisition, becomes for her owner a tool for better cash flow allocation.

In our model, cash flow allocation and equity vs. debt structure are key points.

Indicative structuring:

  • Borrow 60% to 100% of the yacht’s fair market value, with up to 50% of loan secured by a mortgage on the yacht.
  • In case of Equity Release, part of the equity is invested in financial products with the lender and part is made available to the owner. Depending on the type of investment (low or medium risk profile) the return will offset part of the interest margin of the loan facility.

OPTIMAL STRUCTURE

  • Use the minimum amount of own equity.
  • Mitigate the cash outflow through an attractive capital repayment mechanism:
  • Annual capital repayment in arrears.
  • Balloon payment: up to 50% of loan facility due at maturity.
  • First capital repayment 12 months after draw-down.
  • Up to 7 years loan maturity

ACHIVEED RESULTS

  • Access to a larger panel of lenders worldwide.
  • Access to key people within credit committees for swift decision taking.
  • Optimized level of pre and post-delivery guarantees.
  • Optimized cash-flow, in line with the client’s projects.

OUR PRODUCTS & SERVICES

THE GOAL

Supply our customers with all financial instruments required to:

  • Purchase a Yacht (new construction or pre-owned).
  • Restructuring existing debt.
  • Release equity tied-up in a yacht.

 

 

FINANCING TOOLS

  • Acquisition and Construction
  • Equity release
  • Loan restructuring

      through

  • Mortgage loans
  • Syndicated Loans
  • Operating Lease for aviation

STRATEGIC CONSULTING & PROJECT MANAGEMENT

For all acquisition, new construction or sales projects, we manage all aspects on the client’s behalf, ensuring smooth and timely delivery, through the following tools:

PROJECT ASSESMENT

  • Advice on optimal structure.
  • Cost & revenue optimization and forecast.
  • Risk assessment: foreseeing and structuring risk linked to high end asset acquisition/construction or ownership.

PROJECT MANAGEMENT & FOLLOW-UP TOOLS

  • Drawing up the framework of the transaction.
  • Drafting executive summaries stating the roles of all parties involved.
  • Setting-up resource management tools (time, human and financial resources).
  • Handling compliance issues.
  • Coordinating technical surveys & asset appraisal.
  • Periodic monitoring.

MARKET INTELLIGENCE

  • Market studies: market history, analytics & survey, statistics, macro-environment studies
  • Product implementation & opportunity assessment studies
  • Due diligence services for informed decision making: commercial due diligence, project due diligence, subcontract, broker / buy-side due diligence

COORDINATION & TRANSACTION CLOSING

  • Client’s representative
  • Law firms
  • Lenders
  • Insurance providers
  • Asset suppliers
  • Local authorities

LIST OF DOCUMENTS TO BE PROVIDED FOR APLICATION

  1. Copy of passport of the ultimate beneficial owner of the Borrower
  2. Net Worth Statement provided in attachment – to be filled in and signed.
  3. Tax return, income and capital gains for the last 2 years
  4. Supporting evidence of revenues and assets declared in the net worth statement.
  5. If the client is the shareholder or the final beneficial owner of one or more companies, latest audited (if any) financial statements for the company where his income is coming from
  6. About the yacht : copy of the sales & purchase contract
  7. Concerning the Special Purpose Company (the Borrower):
  • Articles and Memorandum of Association
  • Certificate of Incorporation
  • Certificate of incumbancy
  • List of Directors and copy of their passport
  • Shares certificate
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