For a case study I have to work on for a university course, about a real-estate-development project, I need to simulate the financing with different proportions of equity (40%), senior loan (35%), junior loan (15%) (both from banks), and mezzanine financing (10%) (over 5 years, starting now). I tried to do research, mostly on the net, but did not find any credible sources. Can you give a hint where this can be found (I only need approximate values, to have an estimate)? Is there some national or international index or something similar?
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$\begingroup$ inginvestment.com/idc/groups/public/documents/… Here, for example, I found a value of 4.5% for a senior loan (page5), but it does not say anything on the runtime, the conditions, etc. $\endgroup$ – Marie. P. Nov 28 '12 at 22:12
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The answer to this is, unfortunately, not straightforward due to the number of moving parts and no strong reference point.
These types of interest rates can vary highly -- which, during the course of your studies, you will discover is partly a function of the risk-free rate and the risk-premium the project attracts with respect to similar projects. There is also a high degree of variability with respect to the real-estate developer's perceived credit risk.
You can certainly back out much of the data you need using Aswath Damodaran's corporate finance database under the "Updated Data" tab:
http://pages.stern.nyu.edu/~adamodar/
By point of reference, Senior Secureds generally represent 1x Assets or EV. Senior subs about 4-5x and Jnr Subs around 7-8x.
What you really want to find is the spread these products currently have over LIBOR. As you're a student, you should be able to get access to Bloomberg where you can use the YCRV function or any of the enormous cap structure / fixed income functions. Likewise via CapitalIQ.
Failing that you could try ValueLine - your school will almost certainly have a subscription - and again back out the implied rates.
As a last ditch attempt, use the implied rates priced into ETFs of corporate bonds of differing grades. BarCap has quite a few of these listed in the US.
