Our Approach

Virtus provides highly flexible debt capital on highly competitive terms, structured to accommodate project-specific needs (rather than projects bending to debt provider needs)

Loans cover 100% of project capital requirements, subject to: (i) completion of diligence; (ii) underwriting approval; and (iii) establishment of a Reserve Account equal to 25% of project collateral, maintained in liquid form (cash or investment-grade securities) through a cash escrow, Deposit Account Control Agreement (DACA), or Standby Letter of Credit (SBLC), with the Lender as beneficiary.

Typical terms considered:

  • Flexible terms (5 – 30 years)

  • Flexible amortization schedules

  • Limited or no additional reserve requirements

  • Accordion features to support future expansion at pre-negotiated rates

  • Financial covenants designed to preserve positive liquidity throughout the life of the loan facility

Virtus will, on a case-by-case basis, consider large-scale developmental projects, minimizing equity dilution through convertible debt structures or equity participation.

Virtus’ extensive equity experience allows for designing its offering to work with the client to mitigate client risks, rather than structuring only for lender risk mitigation

The reserve account can be structured in various ways. However, the following methods are the most commonly utilized:

  • Standby Letter of Credit (SBLC): The SBLC must be issued by a bank rated A+ or higher by S&P, with total assets exceeding $200 billion, and must be approved by the Lender. The SBLC is well-suited for larger reserve accounts, particularly when the SBLC Provider holds significant securities balances at a qualifying financial institution.

  • Blocked Deposit Account Control Agreement (DACA): Cash or cash equivalents maintained in a deposit account at a bank rated A+ or higher by S&P, with a Virtus special purpose entity (as Lender) holding a security interest on the account and with draw approval rights.

  • Escrow Agreement: Escrow services would be facilitated through the Lender’s Florida-based legal counsel, with funds held at Bank of America.

Provider Risk Considerations:

The level of risk assumed by the SBLC Provider depends on the negotiated terms, ranging from substantial equity-like risk to minimal risk. In most cases, the Provider assumes minimal draw risk as loss given default exposure is covered by existing and expected cash reserves in lieu of SBLC.