Structured Financing

CMAC’s philosophy has always been, if we can’t improve our clients existing financing structure, we shouldn’t be compensated. With the pressure on us, there is no risk to the borrower to let CMAC “take a look”.This is why over half of CMAC’s clients have refinanced with their incumbent lender, but at improved rates and terms. It’s a recurring theme that makes our clients a little bit crazy. How, after an extended negotiation with their bank who may have won a bid and assured the borrower that they were as low as they could go, could they move so much lower in response to CMAC’s Involvement.

There are two keys that CMAC holds which are used on behalf of our clients to make the “lowest possible price” a starting point. Those keys are leverage and data. CMAC sees hundreds of proposals from every part of the country every month and uses those proposals to “globalize” the markets and bring the most aggressive pricing to that borrower’s local market.

No matter the financing needs of your group we can obtain capital for the following.

  • Refinance Existing Real Estate
  • Construction Financing
  • Land Loans (with intent to develop on)
  • Lines of Credit
  • Equipment Financing
  • Physician Equity loans

Cancer Specialists of North Florida Set New Loan Spread Low

CSNF Overcomes Hurdles to Grab Prized Financing

A meaningful part of CMAC’s value is in its ability to empower bankers on the local level to offer more aggressive financing terms by sharing knowledge on what their bank has offered to CMAC clients in other markets. Each CMAC closing provides new data from which to push the ever-evolving boundary of favorable financing terms. In this instance, a national bank had recently closed on an Ophthalmology deal for a client in Iowa at a spread of less than 1.00% over Libor. That spread resulted in a 10-year fixed rate of just over 3.00%. At that time, CMAC became aware that this particular bank was trying to secure medical market share throughout the country. Banks are very cyclical in nature. As their loan portfolio evolves, they will have changing appetites in different industries and in different markets. It became apparent to CMAC that this particular bank was seeking to increase its medical market share and was willing to ‘buy the business’ by extending extraordinarily low rates to medical groups.
Because of the secular nature of any bank’s appetite, it is important to take action and move on these opportunities before the climate changes. As the bank saturates itself with medical clients, it will look to diversify through other industries and will inevitably begin to propose higher priced medical real estate loans. This will undoubtedly change. Their focus will switch to profitability, as opposed to increasing market share.
CMAC sent out an RFP to a number of banks in North Florida in hopes of securing more favorable terms than the existing financing. However, with this national bank’s appetite in mind, we made sure to connect the North Florida bankers with their colleagues in Iowa, so they could discuss the terms of the recent closing. Sure enough, this information empowered the North Florida bankers to provide exceedingly aggressive terms (5 basis points below the same bank’s sub L+1.00% spread on the Iowa deal). A new lower pricing benchmark was set and CSNF had a proposal in hand that would result in materially lower rates than their current loans. However, it was not quite as simple as it might have been. The appraised values meant that the Loan-To-Value on the new financing was going to be above the bank’s approved maximum of 85%. Undeterred, the bank made policy exceptions and took assignment of the previous bank’s swaps, and blended a portion of the negative value into the new interest rates as opposed to adding them to the loan amounts. This structuring enabled a refinancing of the entry debt —This meant that all of the debt could be refinanced without any cash out of pocket from the physicians.

Client Testimonials

Brad Smith

Brad Smith
CEO, Virginia Eye Institute

“I want to thank you and your team again for the results you’ve managed to achieve thus far with our refinance. The executive committee was very pleased with the proposals and it was an easy decision to move forward. I think our bank choices offer outstanding options for VEI. I don’t think we can go wrong with either one. Looking forward to next steps in the process.”

Michael Goldenberg

Michael Goldenberg
CEO Healthcare Realty Advisors, Inc. & Consultant to the Rothman Institute

“I would like to thank you and your whole team… we exceeded our estimates on every level from net proceeds to final rates.”