Dubai, United Arab Emirates - Wednesday, 13. September 2023
As part of its strategy focused on investments into debt structures, Arzan Wealth (DIFC) Limited (‘Arzan Wealth’), a Dubai-based consulting firm governed by the Dubai Financial Services Authority, has advised on an investment into a tax-efficient Jersey SPV that would offer an Amortizing Mezzanine loan to a US based Sponsor and backed by a portfolio of Rental Single-Family Homes in Baltimore, Maryland, USA. The structure has been created to comply with Shariah guidelines.
This portfolio being financed includes 491 total rental units all located in Baltimore, Maryland, USA. The properties currently have an average occupancy of 88% and are rented below market rates. The credit quality of the rental cash flows is greatly enhanced by the fact that approximately 61% of portfolio rent is supported by local and federal government programs which are aimed at keeping key workforce housing affordable.
The term of this mezzanine loan is three and a half years with a one-year extension option that is contingent on meeting strong minimum covenants. Distributions would be made to investors on a quarterly basis at an average rate of 11% p.a. during the loan term. With the final fixed payment, the net IRR is projected at ~13.3% net of fees, taxes, and expenses.
Arzan Wealth advised on the structuring of the mezzanine instrument and the due diligence of the underlying collateral assets and will continue its advisory role during the holding period of this investment.
Muhannad Abulhasan, CEO of Arzan Wealth said:
“Arzan Wealth's key objectives are to safeguard its clients' assets, offer stable and secure income, and broaden transaction variety in the key markets we operate in. To bring opportunities with a favorable risk-reward dynamic to our clients, Arzan Wealth is particularly focused on its debt platform this time, given the present elevated interest rate environment. The amortization component built into our transactions also helps our clients to recover their initial capital faster and more efficiently and re-invest it in new investment opportunities. By providing its clients with top-notch consultancy services, Arzan Wealth is committed to supporting them strategically, and carefully diversifying their international investments. The foundational asset you have, is your vision of where you want to be”.
Notes to Editors
About Arzan Wealth (DIFC) Limited
Arzan Wealth is an investment advisory firm registered at the Dubai International Financial Centre (DIFC) and is regulated by the Dubai Financial Services Authority (DFSA). The contents of this press release are directed at Professional Clients only, persons other than Professional Clients, such as Retail Clients, are NOT the intended recipients of this press release and its content. Arzan Wealth currently advises various professional clients on real estate, private equity, and other investments with a total value of assets advised around US$ 2.55 Billion. Arzan Wealth focuses on arranging yielding investments in major global markets, as well as bespoke investments that meet the requirements of specific clients.
Prior to making an investment decision, you should conduct such investigation and analysis regarding the investment product(s) described herein as you deem appropriate and to the extent you deem necessary, obtain independent advice from competent professionals, to enable you to understand and recognize fully the risks arising in respect of such investment decision.
Past or projected performance is not necessarily a reliable indicator of future results. Arzan Wealth (DIFC) Limited accepts no liability for any loss arising from the use of this document or its contents or otherwise arising in connection therewith.
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Contacts
Ahmad AlSabbrei
Head of Investment Operations
a.alsabbrei@arzanwealth.com
+965 9988 8624
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