Real Estate companies historically relied on the bank loan and securitisation markets to raise debt finance. Following the financial crisis, the volume of asset-backed securitisation issuance has been significantly reduced due to a loss of faith in the structured credit rating process and consequent lack of investor demand. This coupled with new bank capital regulation has not only restricted banks’ ability to provide lending to the Real Estate sector, but also Real Estate companies’ direct access to the capital markets. By contrast, Solvency II provides insurance companies with an incentive to lend to the Real Estate sector.
Independent Debt Capital Markets has strong investor relationships with insurance companies and pension funds that are increasingly active in lending to the real estate sector and are able to provide both senior (in bond or loan format) and mezzanine debt.