. Determine whether or not the bank should make the loan and discuss the reasoning behind your recommendation (select only one of the two alternatives below)

. Determine whether or not the bank should make the loan and discuss the reasoning behind your recommendation (select only one of the two alternatives below)

Hellenic National Bank has decided in favor of the loan request to Garda Investment Associates, Ltd. for the construction and development phase and mini permanent financing of the strip shopping center in Romania. In recognition of the growth opportunities in Eastern Europe, the bank has established a representative branch in Bucharest, Romania which will help service the request with the Boston-based institution. However, the loan will be booked in the United States and denominated in U.S. dollars. This will create an additional opportunity to capitalize on the depreciation of the Romanian currency.

The construction and development of the shopping center is expected to take 15 months to complete at a (dollar-equivalent) cost of $3,928,250 including interest. Monthly payments against the mini perm financing may run at $27,141 based upon a 25 year amortization and a 6.75 percent fixed rate, with a balloon payment due in 5 years. The balloon payment of $2,299,790 will then be funded by a takeout commitment in the form of a 15-year mortgage loan from a German pension fund(see calculations below).

Based on our analysis, Garda has submitted all the necessary documentation for the loan request. The documentation includes the credit enhancements used to determine whether to underwrite the real estate loan such as surveys, permits, insurance, contractors’ completion bond, and an environment impact study. The performance bond is written by an insurance company on behalf of the building contractor to construct the strip shopping center in the case where project completion is not guaranteed and takes longer to complete than expected. In addition, Garda has included lease commitments from the tenants in this package which has been crucial to support our decision in favor of the loan request.

In our financial analysis to approve the Garda loan request, we needed to determine whether the income generated from the strip shopping center would adequately service principal and interest on the debt. This is measured through the “debt service coverage” ratio. As stated in the case, net operating income in 2020 and 2021 is $499,172 and $540,645, respectively. If growth continues to be at 8% as the pro forma income statement given in the case suggest, our analysis suggests that debt service coverage is likely to continue to improve(See chart below).

  1. Identify at least three positives and three negatives about the Garda loan request(present these points in the form of bullet statements or phrases).

Positive:

· The borrower has a solid professional knowledge of the business with twenty years of real estate development and management experience, and a current relationship with the Miami office of the Hellenic Bank which helped finance several of his commercial real estate projects in Florida.

· The economic slowdown provided opportunities such lower cost of labor, drop in real estate value, so land was bought and paid off “free and clear” by Garda, and cost of development and investment was also lower. Furthermore, the depreciated value of the Romanian Currency created opportunity for additional savings if the financing could be sourced abroad (e.g. USD).

· The borrower provided all necessary research from independent parties and project expertise professionals. It submitted a file to Hellenic National Bank including all necessary documentation and report information. In turn, the bank hired an independent engineer to evaluate the project and the engineering report supported the Borrower’s data.

Negative:

· Romania is experiencing a slowdown in economic activity and sizeable increase in unemployment. Such factors could affect the business of the shopping mall resulting in less than forecasted cash flow.

· These types of projects Garda Investment Associates are planning to develop are considerably risky, especially in a scenario of an economic slowdown. The OCC CRE Lending handbook states this as Credit Risk. Often times developers fail to complete the project or delay it greatly affecting the borrower’s ability to generate income at the planned time, and therefore forcing the bank to take remediation measures to collect.

· Project proximity with another

  1. How any potential borrower requesting the same type of credit may manage exposure to interest rate risk? Identify the alternate tools available to management.

Forex Contract

Option Hedge

Money Market

SOURCES

https://www.occ.gov/publications/publications-by-type/comptrollers-handbook/commercial-real-estate-lending/pub-ch-commercial-real-estate.pdf

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· Overview of Kant’s ethical theory

· Overview of Kant’s ethical theory

QUESTIONS ATTACHED

This video will provide a a good overview of some of the main components of Kant’s deontology. Specifically, the video takes a closer look at:

· Overview of Kant’s ethical theory

· Hypothetical vs. categorical imperatives

· Universalizability principle (referred to in your reading as the Formula of the Law of Nature)

· Autonomy

· Treating people as ends-in-themselves

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· Hypothetical vs. categorical imperatives

· Hypothetical vs. categorical imperatives

QUESTIONS ATTACHED

This video will provide a a good overview of some of the main components of Kant’s deontology. Specifically, the video takes a closer look at:

· Overview of Kant’s ethical theory

· Hypothetical vs. categorical imperatives

· Universalizability principle (referred to in your reading as the Formula of the Law of Nature)

· Autonomy

· Treating people as ends-in-themselves

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· Hypothetical vs. categorical imperatives was first posted on August 7, 2019 at 11:47 pm.
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Rough Draft Review Process Evaluation

Rough Draft Review Process Evaluation

Purpose: The primary goal of this weekly assignment is to enable you to understand the revision process and revise your paper with the help of a writing specialist.

Prepare:

Step 1: Prepare a shortened version of your Final Paper (at least four pages) by including the following:

Introduction paragraph and thesis statement you developed for your Week 3 Assignment.

Background information of the global societal issue you have chosen.

Brief argument supporting at least two solutions to the global societal issue.

Conclusion paragraph.

Must document any information used from at least five scholarly sources in APA style as outlined in the Ashford Writing Center’s Citing Within Your Paper (Links to an external site.) Note that you will need at least eight scholarly sources for your Final Paper in Week 5.

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