blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Aug 17, 2019 11:57:00 GMT
For those without DDC access... there's an article dated 16th July on WalesOnline showing the current poor state of the asset. Thanks for that, I had not seen the DDC post. Ablrate have been accurate in their advice to lenders on the state of the property. What has not been spelled out is that the freehold element, which forms the security for 67&68, applies to just one of the three joined properties occupied by the borrower's business, the others being the leasehold properties. The valuation of the freehold premises given in the borrower's accounts at 31 July 17 was made in 2018, after the collapse of BN and presumably the demolition. The amount owing on 67 well exceeds that valuation, which was made by the director. Holders of 68, which includes me but to an insignificant extent, can only benefit from the Ablrate proposal, imo. Holders of 67 could benefit over an Administrator's sale to the other bidder for the freehold assets, but how do lenders make a judgement? This is a really tough situation for Ablrate - they need views from the holders of 67 on how to proceed. I do not know if they are in a position to disclose the bids made to the Administrator.
|
|
|
Post by dan1 on Aug 19, 2019 16:01:14 GMT
... As a holder of #67 do I have any say in having a £460k charge placed ahead of me? Doesn't look like it because the new loan launches on Weds... Borrower Sector: Leisure & Entertainment Amount: £470,000. Term: 48 months (12 months minimum term). Rate: 13% - Interest and Capital. Security: First Ranking Legal Charge over Property & Company Debenture. Instant Returns: Enabled. Loan Launch: 11am – 21st August 2019 (READ ONLY). Loan Live: 2pm – 21st August 2019.
|
|
|
Post by ladywhitenap on Aug 19, 2019 16:19:15 GMT
dan1Does it make sense to include #129 into this thread title? LW
|
|
|
Post by ablrate on Aug 19, 2019 16:50:42 GMT
Just for clarity, there were no bids worth considering in the Administration, because the property had been left in such a poor state. Just for clarity, we believe that a lender vote cuts across the rules of p2p. Each loan is bilateral between borrower and lender, if a group of lenders' votes override the wishes of the minority then this could be seen as a 'collective investment scheme' where the majority of the 'collective' decides on a course of action. If something is truly bilateral, then your ownership in a p2p loan should not be able to influence my ownership.
We are aware that plenty of other platforms use this method and they may have legal opinions that declare it to be OK, we have a different opinion. However, we are creating further protocols to inform each lender of the process that is happening in delinquency and default from a legal point of view, which, in a bilateral situation would be best practice. Although, not a vote as such, it would give lenders more input during the process.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 19, 2019 19:20:58 GMT
Just for clarity, there were no bids worth considering in the Administration, because the property had been left in such a poor state. Just for clarity, we believe that a lender vote cuts across the rules of p2p. Each loan is bilateral between borrower and lender, if a group of lenders' votes override the wishes of the minority then this could be seen as a 'collective investment scheme' where the majority of the 'collective' decides on a course of action. If something is truly bilateral, then your ownership in a p2p loan should not be able to influence my ownership. We are aware that plenty of other platforms use this method and they may have legal opinions that declare it to be OK, we have a different opinion. However, we are creating further protocols to inform each lender of the process that is happening in delinquency and default from a legal point of view, which, in a bilateral situation would be best practice. Although, not a vote as such, it would give lenders more input during the process. For clarity, I'm not in favour of lender votes. All I want to see is evidence (or at a minimum some sort of explanation) as to why placing a £470k loan ahead of me in the security stakes improves my position as a holder of #67 especially when there is such a conflict of interest. That's not to say that it's not the right thing to do but I would like an adequate explanation and my mails so far have not been met with a response. The security was valued at £1m just 2 years ago. Has so much damage been done to the property that it would not now sell for 50% of that valuation, which would repay in full #67? It does worry me that I have invested in a first charge loan and now, without my approval I am suddenly going to find myself sitting behind a £470k dev loan. I have not consented to this and at a minimum would like a proper explanation.
|
|
stevio
Member of DD Central
Posts: 2,065
Likes: 894
|
Post by stevio on Aug 19, 2019 20:04:42 GMT
... As a holder of #67 do I have any say in having a £460k charge placed ahead of me? Doesn't look like it because the new loan launches on Weds... Borrower Sector: Leisure & Entertainment Amount: £470,000. Term: 48 months (12 months minimum term). Rate: 13% - Interest and Capital. Security: First Ranking Legal Charge over Property & Company Debenture. Instant Returns: Enabled. Loan Launch: 11am – 21st August 2019 (READ ONLY). Loan Live: 2pm – 21st August 2019. Had email but can't find any information on the platform on the new loan? Also 67 doesn't seem to be updated with the latest information? Not really able to find any of the above, am I just blind?
|
|
iRobot
Member of DD Central
Posts: 1,656
Likes: 2,449
|
Post by iRobot on Aug 19, 2019 20:09:08 GMT
Doesn't look like it because the new loan launches on Weds... Borrower Sector: Leisure & Entertainment Amount: £470,000. Term: 48 months (12 months minimum term). Rate: 13% - Interest and Capital. Security: First Ranking Legal Charge over Property & Company Debenture. Instant Returns: Enabled. Loan Launch: 11am – 21st August 2019 (READ ONLY).Loan Live: 2pm – 21st August 2019. Had email but can't find any information on the platform on the new loan? Also 67 doesn't seem to be updated with the latest information? Not really able to find any of the above, am I just blind? I inferred that this bit meant information would appear Weds morning. (Or have I misunderstood the question...)
|
|
|
Post by ladywhitenap on Aug 19, 2019 20:11:22 GMT
Doesn't look like it because the new loan launches on Weds... Borrower Sector: Leisure & Entertainment Amount: £470,000. Term: 48 months (12 months minimum term). Rate: 13% - Interest and Capital. Security: First Ranking Legal Charge over Property & Company Debenture. Instant Returns: Enabled. Loan Launch: 11am – 21st August 2019 (READ ONLY). Loan Live: 2pm – 21st August 2019. Had email but can't find any information on the platform on the new loan? Also 67 doesn't seem to be updated with the latest information? Not really able to find any of the above, am I just blind? new loan info not due until wednesday at 10:00 AFAIK. Maybe you are thinking it is on MT who publish earlier. LW
|
|
stevio
Member of DD Central
Posts: 2,065
Likes: 894
|
Post by stevio on Aug 19, 2019 20:35:44 GMT
AHH my bad, didn't read to end
Know I received email somewhere about changes 67, is that update on the loan info for 67?
|
|
|
Post by ladywhitenap on Aug 19, 2019 20:46:08 GMT
All the emails are on your dashboard. The changes to #67/68 are only a proposal at this stage and will only fly if #129 fills
LW
|
|
|
Post by dan1 on Aug 19, 2019 21:12:49 GMT
Doesn't look like it because the new loan launches on Weds... Borrower Sector: Leisure & Entertainment Amount: £470,000. Term: 48 months (12 months minimum term). Rate: 13% - Interest and Capital. Security: First Ranking Legal Charge over Property & Company Debenture. Instant Returns: Enabled. Loan Launch: 11am – 21st August 2019 (READ ONLY). Loan Live: 2pm – 21st August 2019. Had email but can't find any information on the platform on the new loan? Also 67 doesn't seem to be updated with the latest information? Not really able to find any of the above, am I just blind? stevio - I linked the new loan email with the existing loans (67 & 68) from a combination of the details and the banner piccy of the asset (fresh in my memory from the WalesOnline article). As others have said, the info should appear on Weds.
|
|
blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Aug 20, 2019 8:21:56 GMT
The 50% LTV on a valuation of £1m for 67 was nothing to do with the freehold part of the bricks and mortar. It was based on the valuation, made for the borrower, of the whole business as a going concern, using a multiple of earnings. There was a debenture on the business and a personal guarantee. If the business is closed, the premises is part demolished, the borrower company goes into insolvent administration and the guarantor is not worth chasing, then all you have left is the bricks and mortar valuation of the part-demolished freehold portion of the premises. Which presumably is why 'there were no bids worth considering in the Administration'. The test of Ablrate going forward is in part how the 'First Ranking Legal Charge over Property & Company Debenture' is going to be valued in 129 and how Ablrate will present the LTV.
|
|
pi
Member of DD Central
Posts: 57
Likes: 28
|
Post by pi on Aug 20, 2019 8:56:07 GMT
So the LTV will be properly adjust for 67 and 68 then?
|
|
|
Post by ablrate on Aug 20, 2019 9:52:33 GMT
Blender distilled it correctly. The building was part demolished and you had a leasehold portion on the building who, obviously, were not happy. There was a guarantor on the lease portion, again, not happy. Offers into that scenario were. As per the terms and conditions, in default, loans novate to AAL for recovery in the best way we can. There would have been about a 90% capital loss on 67 and total loss on remaining capital on 68 on the best offer. There plan was to sort out the issues, finish the property and run the business.
Instead of accepting that we negotiated with the various parties to achieve the same result and approach lenders for the funding, as they would have the opportunity finance the completion of the project. It is then run solely for the benefit of the return of lenders funds, after which the project partners have a business.
Blender - we are not presenting an LTV per se. There is the previous valuation to give some idea of where the business was. The valuation will be based on the business going forward. While we know that the business is in a great area and has previously been successful, we haven't extrapolated the projections into an official valuation. One would assume, however, that if they can reach the same numbers as previous (with premises twice the size) there would be a better valuation than previously.
This one is for lenders to look and make their own assumptions.
Also - if there those interested in being an underwriter on this we are trailing the new underwriter program on a limited basis.. Email dbw@ablrate if you are interested (minimum loan amount will apply)
|
|
macq
Member of DD Central
Posts: 1,924
Likes: 1,191
|
Post by macq on Aug 20, 2019 10:15:16 GMT
As i said last week i am now getting out of my depth with this loan but there is an administrators report at CH from the 18th July which has a couple of points.It says in section 4 (paraphrased) we continue to lease with the landlord of the leasehold units and the secured creditor,ABLrate in order to agree a strategy with regards disposal & realisation of the company's interest in the property.We have received offers from 2 companies to purchase the company's interest in both the leasehold & freehold. So while it seems the 2 offers were rejected (what ever they were) what happens if this loan does not fill are they still on the table or is deal or no deal?
Crossed with ABL and their FFF
|
|