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Post by Ton ⓉⓞⓃ on Sept 30, 2014 12:05:34 GMT
12months, £1.9m, ltGDV55%, rate 9%.
Developer of 48yrs
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Post by batchoy on Sept 30, 2014 12:44:07 GMT
On first viewing very little confidence due to the redacted paperwork. My view on this is if you want me to lend you a portion of £1.9M then you at least to have the courtesy of letting me the lender, and not just the middlemen, have all the information otherwise my immediate view is that you are some form of crook with something to hide, and thus a much higher risk.
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shimself
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Post by shimself on Sept 30, 2014 13:05:31 GMT
The valuation report says:
17. VALUATIONS
The current Market Value of the site assuming a 6 month marketing period.
We are of the opinion that the Market Value of the freehold interest in the subject property, in its
current condition, assuming constructions costs as provided by Trinity Construction Consultancy
Limited and with the benefit of vacant possession as at the date of this report, is £1,510,000 (One
Million Five Hundred and Ten Thousand Pounds).
This isn't my expertise, but my reading is that the value of the site as it stands today is 1.5M; this is the security for the loan of 1.9M. Someone tell me I'm wrong please?
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Post by chris on Sept 30, 2014 13:27:20 GMT
The valuation report says:
17. VALUATIONS
The current Market Value of the site assuming a 6 month marketing period.
We are of the opinion that the Market Value of the freehold interest in the subject property, in its
current condition, assuming constructions costs as provided by Trinity Construction Consultancy
Limited and with the benefit of vacant possession as at the date of this report, is £1,510,000 (One
Million Five Hundred and Ten Thousand Pounds).This isn't my expertise, but my reading is that the value of the site as it stands today is 1.5M; this is the security for the loan of 1.9M. Someone tell me I'm wrong please? I'll chase someone for an official response, nor do I know anything about this loan, but don't forget that AC doesn't release all funds at once and that the value of the property will increase as the works are carried out.
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Post by planetx on Sept 30, 2014 13:31:16 GMT
This isn't my expertise, but my reading is that the value of the site as it stands today is 1.5M; this is the security for the loan of 1.9M. Someone tell me I'm wrong please? The initial drawdown will only be for 1m to replace the current funding. The rest will be advanced in stages as the work is undertaken and completed, with the total amount advanced not exceeding 60% of the value of the development at that time. I think that's the idea, anyway.
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Post by Ton ⓉⓞⓃ on Sept 30, 2014 13:55:26 GMT
This isn't my expertise, but my reading is that the value of the site as it stands today is 1.5M; this is the security for the loan of 1.9M. Someone tell me I'm wrong please? The initial drawdown will only be for 1m to replace the current funding. The rest will be advanced in stages as the work is undertaken and completed, with the total amount advanced not exceeding 60% of the value of the development at that time. I think that's the idea, anyway. I think you're correct planetx, I think there's a 'typo' somewhere as it states that the starting ltv is 69%. I put that in quotes as AC put a caveat in Bold Type in the CR that might cover it.
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Post by chris on Sept 30, 2014 13:56:59 GMT
I have an official comment as follows:
The site has been valued in its present condition at £1.437m based on the work completed to the date of the report (5th August 2014). The gross development value of the completed site is £3,480,500 (£1,867,500 for Plot 1 and £1,613,050 for Plot 2). The loan to GDV will be 54.58% excluding interest and with the addition of interest, will be 58.95%.
The initial drawdown requirement is for £1m including fees to repay their existing loan of £950,000, and the remainder to fund the costs to complete the building work. Funds to cover costs to complete the development will be advanced only when supported by monitoring surveyor’s reports. After the initial advance, further tranches will not exceed 60% of the current development works value at any given time. Interest will roll up and be payable at the end of the facility.
In answer to the redacted valuation:
I can confirm that as the borrower wishes to remain anonymous, we remove the details of the address and the borrower’s name. This is carried out by AC and not the borrower. We instructed the valuer and we have a complete copy of the valuation report.
Hope that helps clear up any confusion.
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Post by batchoy on Sept 30, 2014 14:57:04 GMT
After some digging on appropriate sites, I can now fill in the redacted bits, whilst the borrower looks OK there are some question marks about the builder. The one listed in the credit report does not appear to exist as a limited company in the given name, however there seem to be a number of companies sharing same registered address with a similar name but with a bracketed insertion between the company name and the Limited and that fulfil the directorial relationship identified in the credit report, these companies have various financial statuses including some outstanding CCJs, being in liquidation and having winding up orders in place.
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mikes1531
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Post by mikes1531 on Sept 30, 2014 15:09:20 GMT
The interest strikes me as rather low, especially when you consider that it's rolled up and paid at maturity so that there's no help from monthly compounding. The apparent LTV may be quite reasonable, but I'd expect that valuations of high-end properties are a bit variable -- it all depends on the right buyer coming along at the right time. The other thing that strikes me is that, based on recent AC experience, this huge loan is most likely going to require substantial underwriting and the underwriters' units are very likely to dominate the Aftermarket for quite a while, so it could be difficult to sell units without accepting a discounted price.
I'm going to sit on the sidelines and watch this one.
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Post by mrclondon on Oct 14, 2014 19:06:06 GMT
Auction closed this morning with 1.49% of user bids (c. £28k) and 0% underwriter bids, so 98.51% unfunded (most of the £1.9m !).
No response as yet to the Q asked at lunchtime today as to what is going to happen to this one.
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mikes1531
Member of DD Central
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Post by mikes1531 on Oct 14, 2014 19:39:21 GMT
Auction closed this morning with 1.49% of user bids (c. £28k) and 0% underwriter bids, so 98.51% unfunded (most of the £1.9m !). No response as yet to the Q asked at lunchtime today as to what is going to happen to this one. Interesting. I hadn't been following this loan, so I hadn't noticed that there was no green in the horseshoe chart. AC must have had difficultly finding willing underwriters for them to have let the auction end without being fully funded. IIRC, this is the first loan in quite a while that has failed to have full underwriting at the time the auction ended. Or have there been some others recently that I have missed?
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oldgrumpy
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Post by oldgrumpy on Oct 14, 2014 19:47:59 GMT
None of the others had any underwriting this morning (and still haven't). I guess it's because the auction will not continue as the new system is about to
POUNCE.
and AC know this, so haven't bothered to arrange their underwriting until much later when drawdown is imminent.
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bugs4me
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Post by bugs4me on Oct 14, 2014 21:53:33 GMT
Auction closed this morning with 1.49% of user bids (c. £28k) and 0% underwriter bids, so 98.51% unfunded (most of the £1.9m !). No response as yet to the Q asked at lunchtime today as to what is going to happen to this one. Interesting. I hadn't been following this loan, so I hadn't noticed that there was no green in the horseshoe chart. AC must have had difficultly finding willing underwriters for them to have let the auction end without being fully funded. IIRC, this is the first loan in quite a while that has failed to have full underwriting at the time the auction ended. Or have there been some others recently that I have missed? IIRC, the funds need to be in place before the legal formalities can commence. So either the U/W's suddenly stepped in at the last minute (without anyone noticing) to get to 100% or it's been pulled. It seems though that the lower rates on offer plus the AM loans available and many not moving, presumably by more than a couple of U/W's, may be having an effect on the willingness side to invest. I also suspect that AC do not have an unlimited supply of U/W's funds available especially as it would appear to be short term funding to get the loan off the ground prior to offloading on the AM. If that offloading is not happening then.......... There's one at the moment waiting drawdown where the SB's were called in over a week ago with expected drawdown due early last week. I know it's beyond the control of AC and they are doing everything possible but for me it's another reason to simply look at opportunities in the AM. The only saving grace is the loan I'm referring to - well the rate looks satisfactory. Anything less though then those drawdown delays really are a turn-off.
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Post by Ton ⓉⓞⓃ on Oct 14, 2014 22:09:34 GMT
Auction closed this morning with 1.49% of user bids (c. £28k) and 0% underwriter bids, so 98.51% unfunded (most of the £1.9m !). No response as yet to the Q asked at lunchtime today as to what is going to happen to this one. Interesting. I hadn't been following this loan, so I hadn't noticed that there was no green in the horseshoe chart. AC must have had difficultly finding willing underwriters for them to have let the auction end without being fully funded. IIRC, this is the first loan in quite a while that has failed to have full underwriting at the time the auction ended. Or have there been some others recently that I have missed? I think the yachting loan with name ending in SS was the last one not to get enough funding, if you ignore York phones where it had reduced funding but should still fly. Just as OG says maybe there's a surprise in store. Having said that the VR makes for an interesting if confusing read, as it's not entirely clear to me if they're actually allowed to build.... yet. Any opinions on this? IN EDIT I've just seen this proposal in the archive, this would be the first failed loan to be in there if that was really the case.
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mikes1531
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Post by mikes1531 on Oct 15, 2014 12:40:12 GMT
I've just seen this proposal in the archive, this would be the first failed loan to be in there if that was really the case. This loan is in limbo at the moment. Perhaps a decision hasn't been taken yet as to whether this loan will be allowed to fail or whether underwriting will be arranged. If it does become a failure, then I would expect it to disappear. But the new system could be a factor as well, with underwriting only tentatively arranged early on and not formalised until closer to drawdown. The critical factor from AC's point of view is confidence that underwriters can be found for any particular loan, since having a loan fail for lack of funding after AC have invested a lot of time and money in their duedil and progress towards drawdown would be an expensive failure for AC. Not to mention that it wouldn't win them any prizes in the introducing/borrowing community. I expect that the new system -- which I thought was supposed to have been released by now -- will put all the underwriting questions out of view.
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