Case Study - 17.07.2018

HOTEL FINANCING – Secured Private Loan

The securitization of a private loan unleashes the network effects of a family office


For the construction of a new hotel, the owner of a hotel group was seeking alternative financing options via a family office. Borrowing from a bank seemed too expensive to him and the CHF 15 million scale of the project was too small for the issue of a bond. Nor was there any question of a capital increase from the issue of shares. GenTwo’s proposal for the securitization of a private loan convinced him thanks to our flexible platform and the low costs possible even with the smallest volume. So the hotel group was able to borrow money inexpensively and without complications and the family office could allow its broader clientele to participate in a worthwhile project with a high rate of interest and property with security – a perfect match.

GenTwo formulated the comprehensive contract documentation in close collaboration with the family office. Then a loan contract between the issuing vehicle and the hotel group as the borrower governs the details of the finance. To secure this loan contract, a further contract concerning the collateral deposited in favor of the issuing vehicle was concluded. Lastly, the term sheet defines the payment terms of the note. This governs, in particular, the term, the exact match of coupon and interest payments, the perfect documentation of the collateral and the conditions applicable in the event of default on the loan.
The securitization and sale of a loan secured by collateral to several investors in this low price band are both new and exciting. Especially gratifying are the options for family offices, independent asset managers and private banks who can thereby make full use of their networks to be able to offer all groups of clients added value.

Private Debt Financing Case Study



Toni, what were the challenges with this project?
Toni: The project was new, really complex and extremely wide-ranging. Since we could not rely on any reference cases, we had to develop everything from scratch. Here it was the legal setting that took most time.

What exactly was your task?
Toni: As the Key Account Manager I was involved primarily in the structuring of the cashflows and in deriving the termsheet. Here the important thing was to derive the relevant points from the loan contract. One difficulty related to the coordination of coupon and interest payments. So for instance there always has to be sufficient cashflow available from the loan interest for the end customers to receive their coupons at the right time. At the same time, the balance sheet of the issuance vehicle always has to be reconciled.

What did you especially enjoy about this case?
Toni: It was fun to be right at the cutting edge with this pioneering project. I also like the character of this financial instrument since it doesn't just create dependencies as is usual with a loan transaction but rather synergies and allows many groups to benefit from it.



Share this article
Follow GENTWO


service-img



Know-How service-img
12.06.2019
Reveal undiscovered opportunities - check out GENTWO’s latest case study

What is the added value of securitization through an off-balance sheet issuance setup? Our case studies explain potential benefits. A new topic has been added to the growing list of respective whitepapers.

Learn More
Passion Investing service-img
20.03.2019
How to become a chocolate investor

Invest in what you love. We’ll explain how easy it is to turn your passion into a conventional financial product that can be implemented in your portfolio. Today’s example: chocolate.

Learn More
News service-img
15.10.2018
P2P LENDING: Innovative Debt Financing Solution

GENTWO offers the most flexible & transparent solution for the distribution of P2P-loan linked notes.

Learn More
News service-img
26.09.2018
ART INVESTMENT - Portfolio Implementation

It is also a store of value. It is just a shame that this asset class does not play a role when it comes classic asset allocation.

Learn More
Case Study service-img
30.08.2018
INVESTMENT PORTFOLIO - Active Managed Certificate

GENTWO offers the most flexible, fast and secure solution. Many banks offer actively managed certificates (AMCs). However, asset managers with an individual investment strategy are severally restricted with these offers.

Learn More
Case Study service-img
14.08.2018
CERTIFICATE OF THINGS - Private Debt Financing

GENTWO offers a new options for financing. We call it: “Certificate of Things.” Are there more attractive options for the financing of a new machine than a bank loan or private loan?

Learn More
Back to top of page

Back to blogs overview

Latest Posts

Passion Investing service-img
20.08.2019
Investing in the growing South American beef industry

If you love beef, you will understand the ongoing demand for well-bred quality beef cattle. But, how easy is it to find opportunities for such unconventional investments? And once you find them, how simple is it to integrate these investments into your portfolio? Today’s example: a Bolivian cattle farm.

Learn More
Testimonial service-img
20.08.2019
Partnering with GENTWO Digital: A Token Issuer’s Perspective

GENTWO Digital is a subject-matter expert when it comes to the securitization of security tokens, building a bridge between the newly emerging digital and the traditional financial market.

Learn More
Passion Investing service-img
13.08.2019
Seeing the Wood for the Trees: Turning forest into an investable, bankable asset

Are you, as a financial intermediary, feeling increasing pressure to diversify your offering? Do you wish to improve your performance? Convert unconventional assets into an investable solution that can be added to your portfolio. Today’s example: trees.

Learn More
Know-How service-img
06.08.2019
New Crypto Research Report is out

The Incrementum experts feature separate chapters which extensively cover XRP (Ripple Inc.) and Libra (Facebook Inc.). On page 61 you will find an interesting interview with GENTWO Digital’s Managing Partner Lucas Ereth.

Learn More

We’ll make you an innovator.

Securitization of All Assets
Your tailor-made issuance solution for financial products (Swiss ISIN)

Be part of our agenda 2019!