About Monark

Senior debt is secured by a first mortgage and ranks in priority to equity and any subordinated lender.  This priority position reduces risk for the senior lender and pricing of senior debt reflects this level of risk. Monark provides senior debt for both land acquisition and construction either stand-alone or together with mezzanine debt and/or preferred equity.  Having a single source of capital removes a significant amount of uncertainty and complexity from the transaction.

Unitranche or stretch senior debt is a combination of senior and subordinated debt in one package which is charged at a blended rate and provides a higher LVR than straight senior debt.  It can be advantageous as it provides a comprehensive funding solution and streamlines the credit and documentation process.  A unitranche facility can also prove more cost effective than separate senior and subordinated facilities.

Mezzanine debt is typically secured by a second-ranking mortgage and is subordinated to the senior debt lender, effectively sitting between developer’s equity and senior debt.  Pricing of mezzanine debt will reflect this higher risk profile relative to senior debt.
The use of mezzanine debt allows a developer to effectively increase the Loan to Value Ratio (LVR) above a level that would be available from a senior lender.  For this reason mezzanine debt enables a developer to more efficiently leverage its equity in a project, freeing up capital to be available for use elsewhere

Preferred Equity ranks in priority behind Mezzanine and Senior debt. Preferred equity holders have a preferred right to payments over regular equity holders and can be structured in a myriad of ways.  . Typically, it is used to fill a gap in a project’s funding, or to provide additional leverage. Preferred equity can be a more flexible option for developers as it typically doesn’t involve taking security over the land-owning entity or taking a registered mortgage over the land.