Loan to Value default?

United Kingdom

Geopolitical and macroeconomic challenges continue to press the commercial real estate market. In this finance briefing we consider the key initial steps and issues for lenders and borrowers facing a potential default of a loan to value financial covenant in an investment loan agreement.  

We discuss the legal and practical considerations involved with commissioning the property valuation, the loan to value calculations, possible cure rights and the initial options potentially available for lenders and borrowers. 

There are wider considerations when considering a LTV default for a property development financing such as the basis of the valuation and any assumptions that apply prior to Practical Completion or stabilised trading. We will look at those and the next steps for lenders considering enforcement and restructuring options in separate briefings. 

Click here to read the briefing.