Since 1977, Ocean Pacific Capital has been a leader in providing all types of mezzanine programs, with financing from $500,000.00 to $1,300,000,000.00.
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Looking for a mezzanine loan? Ocean Pacific Capital is a leader in providing all types of mezzanine programs. Whether mezzanine purchase, mezzanine refinance, or mezzanine construction, our mezzanine department offers a wide variety of options. Particularly in today's tight senior debt market, mezzanine is an increasingly important capital option for growing companies. We provide mezzanine financing from $500,000.00 to $1,300,000,000.00. If you are looking for a commercial mezzanine conduit, or construction mezzanine financing in California, or any other state, with good or bad credit, we can help you find the mezzanine program that meets your unique and individual needs.

A mezzanine loan is a relatively large, unsecured loan (a loan that is not backed by a pledging of assets) with a maturity of at least five years. The loan carries a detachable warrant (the right to purchase a certain number of shares of stock or bonds at a given price for a certain period of time) or a similar mechanism to allow the lender to share in the future success of the business. Mezzanine loans are dependent on cash flow for repayment.

Mezzanine loans are similar to second mortgages, except that mezzanine loans are secured by a percentage of ownership of the project, a 2nd T.D. that owns the property, as opposed to the real estate. If the company fails to make the payments, the mezzanine lender can foreclose on the stock in a matter of a few weeks. If you own the company that owns the property, you control the property. Therefore, a mezzanine loan is secured by the stock of a company, which is personal property and can be seized much faster. Mezzanine loans are large. It is hard to find a mezzanine lender who will thoroughly read through all of the required paperwork for a loan of less than $5 million. Typically, mezzanine lenders typically prefer big projects.

Furthermore, a mezzanine loan, as John C. Murray explains in his article entitled "The Mezzanine Financing Endorsement," is "a result of the increased securitization of real estate and the packaging of pools of loans for sale into the secondary market, mezzanine financing has become very popular in recent years. Mezzanine financing (or, perhaps more appropriately, mezzanine capital) fills the gap between the first mortgage financing, which usually has a loan-to-value ratio of forty to seventy-five percent, and the equity participation of the principals of the borrower, which is usually no more than ten percent of the cost of the project. Mezzanine financing commonly supplies financing of ten percent to fifty percent of the project's capital structure cost. This type of financing can take several forms. Most commonly, it involves extending credit to the partners or other equity holders of a borrower and taking a pledge of such parties' equity interests (including the right to distributions of income). Alternatively, the lender may take a preferred equity position, which is entitled to distributions of excess cash flow after debt service, ahead of the borrower's principals. A "combination" loan structure may also be used to combine a first mortgage loan with mezzanine financing at an aggregate loan-to-value ratio of ninety to ninety-five percent. This type of structure may contain a shared appreciation or contingent feature, an exit fee paid by the borrower, or sometimes, both. The borrower in a mezzanine loan is often an LLC, and the equity participant in the borrowing entity is frequently itself an LLC. In those situations where the mezzanine lender is taking a pledge of some or all of the equity interests in one or more of these entities in connection with the mezzanine loan, the lender may look to the title insurer for special forms of title-insurance coverage. The lender may seek some form of non- imputation coverage, i.e., assurance that the title insurer will not deny coverage under the owner's policy based on matters known to the borrowing entity (or its members) being imputed to the lender. Copies of endorsements offering this type of coverage are attached hereto. Title underwriters may require an affidavit and an indemnity agreement from the existing LLC members, and from the mezzanine lender when it exercises its foreclosure rights under the pledge and succeeds to an ownership interest in the mezzanine borrower. These affidavits and indemnity agreements will state that the respective parties have no knowledge of any fact that will affect the coverage under the policy, and will hold the title insurer harmless for losses resulting from its reliance on such affidavits and indemnities. The title insurer may also require, and review, financial statements from all relevant parties in order to achieve a comfort level for relying on the aforementioned indemnity. The attached endorsements state that (as agreed to by the insured and its equity members) all payments for loss under the policy will go directly to the mezzanine lender, and that there will be no denial of coverage as the result of the transfer of any of the LLC membership interests to the mezzanine lender. The endorsements further provide that the title insurer waives its right of subrogation and indemnity against any of the insured owner's equity owners until the mezzanine loan is paid in full. If a loss occurs under the policy, the amount paid by the title insurer is limited to the actual loss less a percentage thereof equal to the percentage of LLC membership interests not owned by the mezzanine lender at such time. If the loss occurs before the mezzanine lender's acquisition of the insured owner's membership interests, the mezzanine lender is not required first to pursue its remedies against other collateral. However, the title insurer's liability in any event is limited to the amount of the mezzanine loan, and the title insurer is entitled to credit for any amount paid out under a simultaneous loan policy. The title insurer is also entitled to reimbursement from payments received by the mezzanine lender from other security. The term "mezzanine lender" can be defined to include the owner of the mezzanine loan and each successor in interest in ownership of the mezzanine loan, and include any subsidiary or affiliate entity of the owner of the mezzanine loan. The availability and content of the attached endorsements will vary depending on factual and underwriting considerations, as well as statutory and regulatory restraints in certain states." Mezzanine lenders and commercial mezzanine construction lenders await our clients' application for a mezzanine loan, a multifamily or apartment construction loan, a commercial construction loan, a condo, or residential subdivision construction loan, or a land development loan.

Click here to apply now or for more information, and our recent closings, please visit our commercial loans page.

Whatever your financing needs,
we will tailor a loan that's right for you.

 


Daily Oil & Gas and Wall Street Journal News
10/18/19

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Posted on Wednesday October 16, 2019

WTI and Brent crude oil finished higher for the second consecutive day.

$4B India Complex Might Use Wind and Solar Power
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This photo shows the designed site for the chemical complex, Mundra Port in Gujarat, India. PHOTO SOURCE: Adani

Saudi Aramco to Delay IPO Launch
Posted on Wednesday October 16, 2019

Saudi Aramco has postponed the launch of the world's largest IPO, a move that may put the oil giant's planned November listing in jeopardy.

Rangeland Midstream Canada Begins Oil Pipeline Construction
Posted on Wednesday October 16, 2019

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Marathon Petroleum Board, Investors in Talks About CEO
Posted on Wednesday October 16, 2019

Marathon Petroleum Corp. board members are meeting this week with activist investors to discuss CEO Gary Heminger's future and the company's strategy amid calls to split up its businesses.

Gulf Oil Production to Set Records Through 2020
Posted on Wednesday October 16, 2019

Annual oil production in the Gulf of Mexico is expected to jump to 1.9 million bpd in 2019.

Aramco's IPO Comes in Midst of Rough Times for Saudi Markets
Posted on Wednesday October 16, 2019

Anyone buying into Saudi Aramco's initial public offering in anticipation of a quick rebound in the country's stock market may be in for a disappointment.

Asian Buyers Seek Oil From Closer to Home
Posted on Wednesday October 16, 2019

Soaring oil tanker costs are boosting Asian demand for crude grades produced closer to home.

BHGE Drops the GE
Posted on Wednesday October 16, 2019

Baker Hughes, a GE company (BHGE) reported Thursday that it has changed its name to Baker Hughes Co.

Buyer for Chevron's UK Fields Seeks Funds From Traders
Posted on Wednesday October 16, 2019

A unit of Delek Group is seeking alternative means of financing to complete its $2B acquisition of some of Chevron’s North Sea oil and gas assets.

Wall Street Journal
Commercial News

10/18/19

WSJ.com: US Business

AT&T in Talks to Resolve Elliott Management's Activist Campaign
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Businesses Give Draft Brexit Deal Cautious Welcome, but Questions Remain
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Juul Halts Online Sales of Some Flavored E-Cigarettes
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Fed Eyes Another Rate Cut, Weighs When to Stop
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House Republican Asks for Details on Fed Balance-Sheet Operations
The top Republican on the House Financial Services Committee is seeking more details about the Fed?s plan to expand its asset portfolio and wants to know whether regulations played a role in recent dysfunction in short-term lending markets.

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Charles Elfsten, President
Charles A. Elfsten
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