mary
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Post by mary on Sept 10, 2017 9:28:42 GMT
According to the latest T&Cs this the ranking priority for repayment of a loan...
Payments ranking in priority as a matter of law, be applied in the following order of priority:
a) first, in or towards payment pro rata of any costs, charges, expenses, taxes and liabilities of any kind incurred by the Security Trustee in relation to the Security Document; b) secondly, in or towards the payment pro rata of any principal due to the Lender Members of the Loan Contracts in relation to Tranche A; c) thirdly, in or towards the payment pro rata of any principal due to the Lender Members of the Loan Contracts in relation to Tranche B; d) fourthly, in or towards the payment pro rata of any principal due to the Lender Members of the Loan Contracts in relation to Tranche C; e) fifthly, in or towards the payment pro rata of any accrued interest due to the Lender Members of the Loan Contracts in relation to Tranche A; f) sixthly, in or towards the payment pro rata of any accrued interest due to the Lender Members of the Loan Contracts in relation to Tranche B; g) seventhly, in or towards the payment pro rata of any accrued interest due to the Lender Members of the Loan Contracts in relation to Tranche C; and h) finally, in or towards payment pro rata of any unpaid fees owing to MoneyThing as agent under the Loan Agreement.
However, I am confused as some loans are split into Tranches A, B, etc (as per above) eg. BPF541; but some loans are split into Tranches 1, 2, etc e.g. FP545; and some are split into Drawdowns 1, 2, etc, e.g. MTAS746.
Do the same priority rankings apply, as per the T&Cs where the labelling is Tranche 1 or Drawdown 1??
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archie
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Post by archie on Sept 10, 2017 9:37:10 GMT
Tranche A,B or C will have different priorities. Usually different interest rates too.
Tranches 1,2,3 (these usually have different durations) or Drawdown 1,2,3 etc all rank equally.
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Post by GSV3MIaC on Sept 10, 2017 20:07:42 GMT
However, AIUI, if tranche 1 gets repaid (because its end date passes) then obviously it ranks ahead of tranches repaid later, simply because they can't come round and reclaim the money .. the debt is reduced, and the new debt is shared equally among the remaining tranches.
It's a lot more confusing here (and at FC) where (identical) tranches stay separate forever than at Ly (for instance) where they all get rolled into one mega-loan.
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archie
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Post by archie on Sept 11, 2017 6:18:31 GMT
However, AIUI, if tranche 1 gets repaid (because its end date passes) then obviously it ranks ahead of tranches repaid later, simply because they can't come round and reclaim the money .. the debt is reduced, and the new debt is shared equally among the remaining tranches. If a tranche repays it no longer ranks at all. The point was in the event of default the remaining parts of the 'Tranches 1 to n' type loans rank equally. In a way you could say they are a 'keep it simple' version of amortising but the capital repays in stages rather than monthly.
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