macq
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Post by macq on Jan 16, 2019 15:13:46 GMT
My mental faculties are undoubtedly dulled by the head-cold I’m currently suffering from, but can someone please explain why this portfolio loan (at 8%) might be preferred versus the 2 existing loans to the same borrower (currently available on the SM at 13%+)? All I’ve come up with so far is perhaps project diversification. not checked but think from memory the 1st loan repays late spring but not sure anyone would be surprised if the existing loans repay early
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SteveT
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Post by SteveT on Jan 16, 2019 15:19:19 GMT
My mental faculties are undoubtedly dulled by the head-cold I’m currently suffering from, but can someone please explain why this portfolio loan (at 8%) might be preferred versus the 2 existing loans to the same borrower (currently available on the SM at 13%+)? All I’ve come up with so far is perhaps project diversification. not checked but think from memory the 1st loan repays late spring but not sure anyone would be surprised if the existing loans repay early It’s actually the 2nd loan (for £300k) that’s due for repayment first, in late July this year, but yes, early repayment of one or both seems likely if multiple tranches of the new 8% facility keep filling.
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blender
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Post by blender on Jan 16, 2019 17:40:34 GMT
not checked but think from memory the 1st loan repays late spring but not sure anyone would be surprised if the existing loans repay early It’s actually the 2nd loan (for £300k) that’s due for repayment first, in late July this year, but yes, early repayment of one or both seems likely if multiple tranches of the new 8% facility keep filling. Which is why I swapped into 101, which is interest only, with an 18 month minimum term. Mind you, I did that with the existing M** loans (which kindly hosted the 'system test' portfolio loan) and it was a bumpy ride to 16%.
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treeman
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Post by treeman on Jan 16, 2019 17:46:47 GMT
My mental faculties are undoubtedly dulled by the head-cold I’m currently suffering from, but can someone please explain why this portfolio loan (at 8%) might be preferred versus the 2 existing loans to the same borrower (currently available on the SM at 13%+)? All I’ve come up with so far is perhaps project diversification. Nope-doesn't work for me either. Same reason. Also both existing loans quoted as 50% LTV, portfolio 'max 55%' LTV
(clearly suits the borrower ......... )
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Post by Ace on Jan 16, 2019 17:51:15 GMT
It’s actually the 2nd loan (for £300k) that’s due for repayment first, in late July this year, but yes, early repayment of one or both seems likely if multiple tranches of the new 8% facility keep filling. Which is why I swapped into 101, which is interest only, with an 18 month minimum term. Mind you, I did that with the existing M** loans (which kindly hosted the 'system test' portfolio loan) and it was a bumpy ride to 16%. If they're allowed to use the portfolio loans to repay the self-select loans then they should be prevented from trading at a premium to prevent unwary buyers from making an instant loss on repayment. ablrate ?
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Post by ablrate on Jan 16, 2019 18:44:56 GMT
Which is why I swapped into 101, which is interest only, with an 18 month minimum term. Mind you, I did that with the existing M** loans (which kindly hosted the 'system test' portfolio loan) and it was a bumpy ride to 16%. If they're allowed to use the portfolio loans to repay the self-select loans then they should be prevented from trading at a premium to prevent unwary buyers from making an instant loss on repayment. ablrate ? They are not using these funds to repay those loans. These will be on separate security as detailed in the borrowing proposal.
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blender
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Post by blender on Jan 16, 2019 22:38:31 GMT
£50k done, which is not bad. Good to see another portfolio loan. I hope it goes well. Also the SM is looking perkier, price-wise.
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rogerbu
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Post by rogerbu on Jan 20, 2019 16:27:46 GMT
ablrate Is there any possibility that with these loans we individually (as lenders) are committed/contracted to fund up to the full £6M? I do not want to see another LY London Loan saga
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Post by ablrate on Jan 21, 2019 14:02:15 GMT
ablrate Is there any possibility that with these loans we individually (as lenders) are committed/contracted to fund up to the full £6M? I do not want to see another LY London Loan saga Hi - definitely not. Our paperwork is very clear that it is best efforts. After the LY affair we had another review of the documents in all loans to be prudent and we are very clear that there is no obligation for lenders to lend.
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ceejay
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Post by ceejay on Jan 21, 2019 16:44:36 GMT
ablrate Is there any possibility that with these loans we individually (as lenders) are committed/contracted to fund up to the full £6M? I do not want to see another LY London Loan saga Hi - definitely not. Our paperwork is very clear that it is best efforts. ... Funny. I have a clear recollection of having it hammered into me that when negotiating contracts one should never accept the phrase "best efforts", as it could be taken to mean "all efforts up to and including those that will bankrupt the company". As opposed to "all reasonable efforts", which is what I think you meant.
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boundah
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Post by boundah on Feb 15, 2019 18:16:39 GMT
Update email just in: rate increasing to 12%, with back-interest for existing investors in the form of a bonus. The press release sounds promising, tho we need to wait till Monday for full details.
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KoR_Wraith
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Post by KoR_Wraith on Feb 15, 2019 23:50:16 GMT
Update email just in: rate increasing to 12%, with back-interest for existing investors in the form of a bonus. The press release sounds promising, tho we need to wait till Monday for full details. I feel 12% better reflects the risk involved in this loan. The security valuation is heavily dependant on the success of the business & the health of the standby power generation sector; two factors that are intrinsically linked. I doubt the security would fetch anywhere near valuation in the event of administration, even at a modest 55% LTV. I'd be more interested in funding this sort of company via an equity offering...
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blender
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Post by blender on Feb 16, 2019 10:21:37 GMT
Update email just in: rate increasing to 12%, with back-interest for existing investors in the form of a bonus. The press release sounds promising, tho we need to wait till Monday for full details. I feel 12% better reflects the risk involved in this loan. The security valuation is heavily dependant on the success of the business & the health of the standby power generation sector; two factors that are intrinsically linked. I doubt the security would fetch anywhere near valuation in the event of administration, even at a modest 55% LTV. I'd be more interested in funding this sort of company via an equity offering... Well, yes. If you look at the company trading report for this borrower on the self select loans you will see that it was downgraded on 1 Feb 2019 to 'not rated', an 'E' risk, while previously it was 45%, moderate risk. It troubles me that this information is not available for the portfolio loans, nor is the loan contract, nor are Ablrate's fees. The service fees on both the self-select loans are 0.33%, which equates to the 4% pa previously stated minimum for the portfolio loans which applied previously. I guess the total annual rate on the new arrangements will be 16%, though I would need this information presented, personally. Having said that, I am happily into 101 at 13%, and it is the same borrower.
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seb8072
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Post by seb8072 on Feb 16, 2019 11:07:51 GMT
I feel 12% better reflects the risk involved in this loan. The security valuation is heavily dependant on the success of the business & the health of the standby power generation sector; two factors that are intrinsically linked. I doubt the security would fetch anywhere near valuation in the event of administration, even at a modest 55% LTV. I'd be more interested in funding this sort of company via an equity offering... Well, yes. If you look at the company trading report for this borrower on the self select loans you will see that it was downgraded on 1 Feb 2019 to 'not rated', an 'E' risk, while previously it was 45%, moderate risk. It troubles me that this information is not available for the portfolio loans, nor is the loan contract, nor are Ablrate's fees. The service fees on both the self-select loans are 0.33%, which equates to the 4% pa previously stated minimum for the portfolio loans which applied previously. I guess the total annual rate on the new arrangements will be 16%, though I would need this information presented, personally. Having said that, I am happily into 101 at 13%, and it is the same borrower.
I'm a bit puzzled here, as you say, the company trading report under company overview indicates an E rating, however I do not see any new evidence under company documents to suggest why this has changed from the original C (45) rating - or am I just going blind? Besides, I'm not sure an E rating (ie not rated) necessarily means a downgrade?
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blender
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Post by blender on Feb 16, 2019 12:11:22 GMT
The creditsafe rating in the SPL proposal is dated 3rd Jan. It was correct on the marketing and drawdown date for the SPL. Since then it has changed to unrated, the date of the revision being two weeks ago. You can see this by going to the SM bids/offers for loans 101 and 109, to the same company, and clicking on the company trading report. I think that downgrade is a pretty safe description. Whether is has any connection with the altered interest rates is something that might be pondered upon.
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