Located in the beautiful country of Spain, specifically in Ibiza, this investment opportunity offers a chance to participate in the development of two luxury villas. The senior secured bond of EUR 7 million will be disbursed in two tranches, with the goal of financing the acquisition of the land and the subsequent development of the properties. The exit strategy for this investment is through the sale of the assets.

The project, spearheaded by experienced real estate developer Testi Federico, involves the acquisition of two land plots in Ibiza to create these luxury villas. Ibiza, known for its natural beauty, vibrant culture, and luxurious amenities, provides an ideal location for such a venture. The total project costs amount to EUR 10.1 million, with EUR 7 million in senior position funding and EUR 3.1 million in Sponsor equity.

With a gross interest rate of 13.5% per annum and a minimum cash-on-cash return of 1.08x, investors can expect a net revenue of EUR 13.9 million from this project. The value of the underlying assets is double the total debt amount, resulting in a loan-to-value ratio of 50%. The capital structure includes various security measures such as a first-lien mortgage on the assets, a pledge on the borrower shares, and an Equity Commitment Agreement from the Sponsor.

Investors in this opportunity will acquire LUX certificates through the YELDO senior secured bond, which is issued by Ares S.r.l. and backed by the assets of the project. The maturity period for this investment is 21 months, with a bi-annual coupon of 6.75%. The average selling price per square meter is estimated at EUR 16,725, generating a gross margin of 43%.

With a focus on luxury real estate development and a solid track record across the European Union, Testi Federico presents a compelling opportunity for investors looking to participate in the growth of the Ibiza property market. The combination of a prime location, experienced sponsor, and secure capital structure makes this investment an attractive option for those seeking to diversify their portfolio in the real estate sector.