Most of what Watson AM arranges is short- to mid-term: development facilities, acquisitions, renovations, terms counted in months. This file sits well outside that pattern. A property owner in Herlev, Greater Copenhagen, needed to refinance an existing loan on more favourable long-term terms, and the facility we structured runs for 20 years, the longest tenor in our published book. Here is the situation, how the security was set, and what a term of that length asks of a file.
Facility
CHF 2'820'000
refinancing
LTV
67.6%
Term
20 years
Term sheet
within 1 month
A refinancing that needed a longer horizon
A maturing loan leaves an owner two broad options: replace it with another short facility and face the same exercise again before long, or find investors prepared to match the term to how long the owner intends to hold. The borrower here wanted the second. In Denmark that expectation is an ordinary one, since the country's mortgage-credit system routinely finances property over ten to thirty years, according to Finance Denmark. What the borrower needed was a financing partner prepared to commit for that long against this particular property.
The specifics of the borrower's previous loan stay confidential, as they should in an anonymised record. What the file records is the aim (better long-term terms) and the answer: a single 20-year facility of CHF 2'820'000 at a loan-to-value of 67.6%.
What a 20-year term asks of a file
Over two decades the market will move through more than one cycle, so a long facility needs a cushion that can absorb a soft patch, and security that will still be enforceable years after it was registered. At 67.6% loan-to-value, close to a third of the property's value sits beneath the investors' claim. The rest of the work was matching: finding investors whose own horizon fits a twenty-year commitment, which is a narrower group than the one that funds an 18-month development loan.
How the security was set
The facility carries the two layers found on each of our twelve published case files: a first-rank mortgage over the property in the investors' favour, registered as a condition of their funding, and a personal guarantee from the borrower behind it. On a long facility the registration matters even more than usual, because the protection has to hold for the whole life of the loan, and an error in the register is far harder to correct in year twelve than at signing. As on every Watson AM file, the security was registered before the investors' money was disbursed.
The timeline
The length of the facility did not slow the answer. The term sheet was issued within a month of first contact, and the facility has since funded. A long tenor needs careful matching, though the diligence that supports it runs on the same nine steps as a six-month loan.
What the file shows
Secured financing and bridge lending are different categories. Our published book runs from a six-month facility for an alpine hotel in the Valais to this 20-year refinancing, because the sensible term follows the asset and the borrower's plans for it, and each file goes to investors whose horizon matches. Across that range the security on the published files stays the same: a first-rank mortgage registered as a condition of funding, with a personal guarantee behind it.
How this connects to Watson
Watson AM arranges real-estate-backed financing across eleven European markets and sets the term by the project instead of fitting every borrower to one product. This file sits at the long end of a published book whose facilities range from CHF 1'000'000 to CHF 34'200'000. A borrower can read it as evidence that the term can fit the asset; an investor can read it as a long facility carrying the same security as a short one. Borrower and investor material is available on request.
Common questions
How long can a secured property refinancing run?
As long as the asset and the borrower's plans justify. Watson AM's published facilities run from six months to 20 years, and this Herlev refinancing sits at the long end: a single CHF 2'820'000 facility over two decades. The term is set by the project first, then the file goes to investors whose own horizon matches it.
Why refinance onto a 20-year term instead of another short facility?
A short replacement leaves the owner facing the same exercise again before long. Matching the term to how long the owner intends to hold removes that repeat refinancing, and in Denmark it's an ordinary expectation: the mortgage-credit system there routinely finances property over ten to thirty years, according to Finance Denmark.
What security does a 20-year facility carry?
The same two layers as each of our twelve published case files. A first-rank mortgage over the property is registered in the investors' favour as a condition of their funding, and the borrower's personal guarantee sits behind it. Over a long term the registration has to be right at signing, since an error in the register is far harder to correct years into the loan.
Does a long tenor slow down the funding process?
Not on this file. The term sheet was issued within a month of first contact and the facility has since funded. Finding investors prepared to commit for twenty years narrows the field, though the diligence runs on the same nine steps used for a six-month loan.
Watson AM, Basel. This article is general market commentary for professional and qualified investors and for real-estate developers. It isn't investment, legal, or tax advice, or an offer of any financial product.
Sources
- Watson AM internal deal record (anonymised): funded 20-year refinancing facility, CHF 2'820'000, Greater Copenhagen, loan-to-value 67.6%, first-rank mortgage and personal guarantee, term sheet issued within one month.
- Finance Denmark (Finans Danmark), the Danish mortgage-credit system: property typically financed over 10 to 30 years, with active refinancing.
- Bank for International Settlements, "The Danish mortgage market," on the system's long-tenor structure.