so if I went through the trouble to get an aval then you would lend me money at libor +2 or 3, when in fact the requirements for an aval are the same as a credit and real estate loans are mostly below your rate, especially when considering that I have to pay for the aval.....
does that make any economic sense to you?
There may be situations which call for this but frankly only a few I can think about and by the way the bank avalizing the notes for the transaction will ask where this is going, that means a lot of explaining and ah, how much does this cost for your involvement.
If it makes any sense please show me that, I suggest a sample transaction on paper, lets say real estate value estimated 100 Million, bank credit line for commercial application of development 80% for 3 years, aval cost for use of credit facility 2%, legal structure cost 1%, interest for note based credit libor +2 USD (which one, I guess 12 month), lets say total 7%, means complete total is much higher than the mortgage solution for 80% at 5.75%, let say even 9% and if I include your cost and the tax problems if and when your funder is outside the project country a mortgage at 11% would be cheaper.
Or am wrong?
