£40m Commercial Portfolio Refinance

The situation

A professional property group approached us in 2026 carrying five separate debt facilities across four lenders, accumulated over more than a decade of buying commercial and semi-commercial property across the South of England. Each facility had been sensible when it was written. Together they had become a burden: different maturity dates falling across a three-year window, different covenant packages tested on different definitions, different reporting requirements, and pricing that ranged from cheap legacy money on the oldest facility to expensive shorter-term debt on the most recent acquisitions.

The group wanted one facility, one lender relationship, one set of covenants and one maturity date, sized at £40 million against a portfolio worth around £66.5 million, which put the gearing at circa 60% loan to value across the book. They also had a disposal plan. Three assets were earmarked for sale over the following two to three years, and the new facility had to let those sales happen without triggering a renegotiation each time.

Why portfolio consolidation is everywhere in 2026

What we have noticed over the last eighteen months is that groups which grew through the cheap-money years are now carrying a stack of facilities written at different times, on different terms, by lenders with different views of the world, and the rate environment has turned that stack from an inconvenience into a real cost. Around a third of the larger refinance conversations we have now start as consolidation conversations. The borrower is not chasing a keener margin on one building; they are trying to collapse an accumulation of debt into a single structure that reflects what the business has become.

My view on this is straightforward. A property group running five facilities across four lenders is not diversified, it is just paying five sets of legal fees and answering to four credit committees. Consolidation puts the group back in control of its own balance sheet, and on a portfolio of this quality the pricing available at the institutional and private bank tier was materially better than the blended cost of the facilities being replaced.

How the facility was structured

We ran the mandate as a structured process rather than a scattergun. The portfolio's scale and quality gave us access to the institutional and private bank funding tier, where lenders will underwrite the portfolio as a single business rather than a collection of buildings. Terms were negotiated with a small number of lenders in parallel and the facility was placed as a £40 million senior debt facility, first charges across the portfolio, with interest cover tested portfolio-wide and staged security release provisions built in for the planned disposals.

Interest cover tested across the whole book

Testing interest cover portfolio-wide, rather than asset by asset, was one of the most valuable features of the structure. On the old facilities, a void in a single building could breach that building's covenant even while the rest of the book was performing well. Under the new facility the aggregate net rent across every asset is measured against the interest cost on the whole £40 million, so a short void or a rent-free period on one unit is absorbed by the income from the others. For a group that actively manages its assets, re-gears leases and takes the occasional strategic void to reposition a building, that flexibility is worth real money.

One asset illustrates the point. The portfolio included a parade with three retail units and six flats above, where two of the flats had rolled onto periodic tenancies and one retail unit was mid-refit between tenants. Under the old lender's asset-level test that building was a covenant conversation waiting to happen. Under the portfolio-wide test it barely registered, because the aggregate income across the book covered the facility comfortably. That is how semi-commercial assets should be held inside a larger portfolio structure.

Staged security release for the disposal plan

The group's disposal plan needed the facility to breathe. We negotiated staged security release provisions under which each of the three earmarked assets can be sold and released from the security pool on payment of a pre-agreed percentage of that asset's allocated loan amount, set above par so the facility balance reduces slightly faster than the security pool shrinks with each sale. No renegotiation, no fresh credit approval, no lender discretion at the point of sale. The group can market each asset knowing exactly what the facility requires from the proceeds, and the lender knows its position improves every time a disposal completes.

Get this wrong and disposals stall. We have seen groups on inflexible facilities forced to seek lender consent for every sale, with the lender holding effective veto over the group's own strategy, and every year we see at least one borrower whose sale fell through while consent was being considered. Release provisions are negotiated at the start or they are begged for later.

What made the twelve weeks possible

Twelve weeks from mandate to drawdown on a £40 million, multi-asset, multi-lender redemption is quick. The single biggest factor was preparation. Before we approached any lender we had the full tenancy schedules for every asset, up-to-date facility statements and redemption figures from all four incumbent lenders, three years of group accounts, and a schedule of the disposal plan with supporting valuations. Assemble the full tenancy schedules and facility statements before you approach anyone; a lender who receives a complete pack on day one underwrites the business in front of them, while a lender drip-fed information underwrites their own doubts.

The legals were the heavy lift. Redeeming five facilities across four lenders means four sets of discharge undertakings, dozens of title documents, and a completion mechanism where every incumbent lender is repaid simultaneously from the new facility's drawdown. Once I understood the shape of the redemption my role was to keep the new lender's solicitors, the group's solicitors and four sets of incumbent lender solicitors moving on the same timetable, and to resolve queries the same day they were raised so nothing sat in anyone's inbox for a week.

Timeline: mandate to drawdown in twelve weeks

The result for the group

The group now runs its debt the way it runs its property: as one business. One lender relationship, one covenant package tested against the whole book, one maturity date it can plan around, and a contractual route to sell the three earmarked assets without asking permission. The blended cost of debt came down against the facilities replaced, and the management time recovered from servicing four lender relationships is not a small thing for a business of this size. Facilities at this scale sit alongside the large commercial mortgages and large bridging facilities we arrange every month, and the same principle runs through all of them: the structure matters as much as the rate.