Equipment and Tenant Improvement Financing

Mesirow has realized the increasing need and demand for Equipment and TI financing.  This has become particularly relevant given the retrenchment of traditional market participants such as regional banks.  Mesirow maintains a unique platform to fill this void in that it can provide up to 100% financing for situations involving investment grade users and up to ~75% of valuations when high value collateral assets are involved.

Tenant / Credit
The product may be applied to situations with both investment grade and/or “credit-worthy” tenants or non-investment grade tenancy

Lease / Contract type
Typically, bondable net
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Note term
Typically 5–15 years but could be longer.  The note terms are typically aligned with the remaining term of the underlying contract or the useful life of the collateral.

Amortization
Typically coterminous with the term of the Note and underlying lease/contract, although various amortization/balloon structures may also be considered

Recourse
Non-Recourse Carveouts, only to the issuer of the Note

LTV / LTC
Up to 100% (assuming underlying credit worthy profile)
50% –75%* (assuming a collateral-based structure)

DSCR
Typically, 1.00x – 1.05x

Transaction rating
Typically non-rated although rating agencies are involved in certain instances

Asset/Collateral Type
Any

Financing Instrument
Typically structured as either taxable 4(a)(2) private placements or 144a private placements

• Equipment finance and leasing
• Tenant improvement financing
• Furniture and fixtures financing
• Sale-leasebacks
• Lease purchase agreements
• Installment sales contracts
• Taxable/tax exempt municipal lease purchase agreements
• Energy savings contracts
• Services agreements
• Facility agreement

• Healthcare and medical equipment
• Manufacturing equipment
• Sports and athletic facilities
• Park district facilities
• General tenant improvements (all real estate types)
• Furniture and fixtures
• Technology and data center equipment
• HVAC
• Lighting
• Industrial equipment
• Public sector assets (e.g. vehicles performing public sector functions)
• Chillers, boilers, central utility plants
• Vehicles of any type
• Aircraft

• Corporate
• Healthcare
• Higher-education (public and private)
• Not-for-profit
• Government (federal, state, local, special districts, component units of government)
• Public Private Partnership (P3)
• Hospitality
• Retail
• Professional and amateur sports

Non-Investment Grade (High-Yield) credits
High-Yield credits will be considered on a case-by-case basis, taking into consideration the underlying credit as well as the collateral value of the equipment.

• Distribution
• Complementary business units within the firm
• Residual Note capabilities
• Ability to provide liquidity / Balance Sheet access when needed
• Access to in-house research, sales, trading

Can you have a balloon at the end of a equipment/tenant improvement financing?
Yes, provided it’s protected with either appropriate credit support and/or certain collateral considerations.

What are the typical note terms of a quipment/tenant improvement financing?
Typically, the note terms range from 10-15 years, but any term may be accommodated depending on the facts and circumstances.

Are these types of financings secured?
Yes, they are typically secured/collateralized with the respective equipment and/or personal property via UCC filings.  Leasehold mortgages may be provided as well in certain instances.
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Can the collateral be used as primary underwriting criteria?
Yes, these financings can be priced, treated, and structured off either credit and/or collateral considerations.