PBL87 - Watford Unit 3 - REPAID (Before Drawdown)
Mar 17, 2016 16:28:31 GMT
locutus and mickj like this
Post by cooling_dude on Mar 17, 2016 16:28:31 GMT
Laon Repaid 21/04/2016 (Before Drawdown - See Updates Below)
Last 3 Updates From SS (ignoring "No change" and pre-live updates)
Observations from the valuation report & other remarks
> There is a restrictive covenant in place preventing the change of use. The borrower is agreeing "Deeds of Variation" to remove this; saving stream think this should take place within 2 months.
> *Savingstream themselves have said that the restrictive covenant reduces the value of the security by 20%, and as such amended the loan offer to reflect this. However, I can't see how they have done this; the valuation report indicates that the market value is with the assumption that the restrictive covenant has been removed, and provide "CONTINUING OFFICE USE" value of £7,450,000. As such, it seems to me that the value of the security is currently £7,450,000 with a current LTV 85%.
Savingstream have acknowledged the above with the following statement on the loan overview
> It has been commented by investors (here & here) who know the region well, that this area is predominantly commercial based and it seems unlikely that replacing these units with residential properties (which is the borrowers plan) would be viable. This is also backed up in the valuation report as a weak point; "Not an established residential location at a micro level".
> The value provided by SS on the loan page is for "VACANT POSSESSION VALUE". However, confusingly the market value is provided as £8,825,000. This seems to be a misprint, as the value /sq ft does equal the £8,815,000 valuation. However,£8,825,000 is the value used throughout the valuation.
>The value reported takes into consideration the expected legislation proposed by the national government to permanently allow conversion from office to residential use under Permitted Development Rights. The current temporary permission expires in May 2016. If for any reason that legislation is not completed there may be a detrimental effect on the value of the property.
> After some (fantastic
) investigation by Please turn me over it looks like the loan PBL33 is related to the borrower of this loan
Note : If anybody wants me to add to this, please just add a comment in this thread......
| Loan Amount | : | £ 6,170,500 |
| Security Value | : | £ 8,815,000 |
| SS Indicated LTV | : | 70% |
| Market Valueation with "restrictive covenant" in place | : | £ 7,450,000* |
| LTV Based on Market Valueation with "restrictive covenant" in place | : | 85%* |
Last 3 Updates From SS (ignoring "No change" and pre-live updates)
Date | Information |
| 21/04/2016 | Unfortunately the borrower has decided not to proceed with this loan after negotiating less expensive finance from their existing high street lender. |
| 12/04/2016 | We are holding a reasonably large amount of this loan back and will be releasing it onto the market over the next week or two. £1m has just been released from our holdings. |
Observations from the valuation report & other remarks
> There is a restrictive covenant in place preventing the change of use. The borrower is agreeing "Deeds of Variation" to remove this; saving stream think this should take place within 2 months.
> *Savingstream themselves have said that the restrictive covenant reduces the value of the security by 20%, and as such amended the loan offer to reflect this. However, I can't see how they have done this; the valuation report indicates that the market value is with the assumption that the restrictive covenant has been removed, and provide "CONTINUING OFFICE USE" value of £7,450,000. As such, it seems to me that the value of the security is currently £7,450,000 with a current LTV 85%.
Savingstream have acknowledged the above with the following statement on the loan overview
"The property is subject to a covenant which prevents a change of use from offices within class B1(a) of the use classes order. The borrower is in the process of obtaining deeds of variation from the beneficiaries of that covenant which will lift the restriction from 1 March 2018. For all values reported in this report (except for the Market Value – Continuing Office Use) we have assumed that the deeds will be completed in a satisfactory manner removing all restrictions for change of use in perpetuity, subject to planning."
> It has been commented by investors (here & here) who know the region well, that this area is predominantly commercial based and it seems unlikely that replacing these units with residential properties (which is the borrowers plan) would be viable. This is also backed up in the valuation report as a weak point; "Not an established residential location at a micro level".
> The value provided by SS on the loan page is for "VACANT POSSESSION VALUE". However, confusingly the market value is provided as £8,825,000. This seems to be a misprint, as the value /sq ft does equal the £8,815,000 valuation. However,£8,825,000 is the value used throughout the valuation.
>The value reported takes into consideration the expected legislation proposed by the national government to permanently allow conversion from office to residential use under Permitted Development Rights. The current temporary permission expires in May 2016. If for any reason that legislation is not completed there may be a detrimental effect on the value of the property.
> After some (fantastic
) investigation by Please turn me over it looks like the loan PBL33 is related to the borrower of this loanNote : If anybody wants me to add to this, please just add a comment in this thread......
| Code Number Assigned | : | 17/03/2016 |
| Loan went live @ | : | 19/03/2016 |
| Allocation | : | 100% |
internet connection, a pc with a blown power supply, a tiny phone screen and old eyes. At least the weather is warm.
