Last autumn we were asked to arrange finance for a group we will keep anonymous. A family-backed developer, respectable balance sheet, strong track record in Lisbon and London, and a new scheme in Valencia. The ask was £46 million of senior development debt, drawn in three countries, secured in three countries, with a bridge on the London leg until two apartments sold. This is roughly the job description of cross-border property finance, and the order of operations matters enormously, so here is how it went.
Week one to four: the unglamorous groundwork
The temptation in a multijurisdiction raise is to approach lenders first and tidy the group later. We did the reverse. Four weeks went into the boring things that decide everything: the intercompany loan positions were documented, the Valencia SPV was cleaned of a dormant entity that had been doing nothing since 2019 except complicating legal opinions, and the family guarantees were reduced to one clean, capped instrument. None of it was clever. All of it was noticed.
The lesson we keep relearning: lenders do not price the scheme, they price the file. A beautiful development in a good market with a messy file gets a worse margin than a mediocre scheme with a clean one.
The lender conversation, in the right order
With the file in order we ran five lenders: a cleared bank for the Valencia leg, two debt funds for the main facility, and two more for the bridge. Sequence matters. The bridge went first, because a bridge is the easiest yes and its terms shape everything else. The main senior term sheets came next, and because the sponsors could compare five lenders against a defined structure, the final pricing came in 85 basis points inside where the first indicative quote had started.
The security package was where the deal earned its fee. Spanish mortgage law is document heavy and notarised to the syllable; Portuguese share security needed a local perfection step that one fund had quietly assumed was automatic; and the UK bridge wanted a charge over a portfolio that already had a facility on it, which meant an intercreditor conversation between people who had never spoken.
Currency added its own layer. Costs in Valencia were euro, sales were euro, but the bridge was sterling because that was where the family's liquidity sat. The facility carried a cross-currency swap on the bridge leg and a clause letting the group switch the drawn currency once the London sales completed. Neither move was expensive. Both required a lender who had done it before, which is a quieter argument for specialist lending than any pitch document.
Where it nearly died
Not on pricing, and not on the market. It nearly died on a condition precedent: the Valencia environmental report, which one lender wanted and the sponsor had not commissioned because the previous lender never asked. Six weeks lost, one lender left the club, and the file survived because the completion calendar had margin built in. Conditions precedent are not admin. They are the schedule.
The facility closed in the spring: £46 million, three jurisdictions, one bridge, no drama at the finish because all the drama had been scheduled early. If there is a method in the anecdote, it is this. In cross-border development finance the work is not finding lenders who like the scheme. It is building a file that makes liking the scheme easy.
A postscript on the lender mix, because it made the difference. The bank brought price and patience. The funds brought certainty and speed, and one of them was willing to stand alone for six weeks while the club assembled. Choosing lenders by what they are good at, rather than by the headline margin, is most of the craft in a raise like this.