bigfoot12
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Post by bigfoot12 on Apr 16, 2016 7:55:36 GMT
chris, stuartassetzcapital, I am trying to get a better understanding of how quickly the provision fund pays out. As an example, imagine that the GBBA had existed much earlier and had bought some of the Plumbing loan; would the provision fund have paid out any money, and if so how much and when? And how would it have done this, would it have bought (at par) the loan from the GBBA? (BTW Well done on delivering the promised deal flow.)
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Post by chris on Apr 16, 2016 17:22:26 GMT
From a technical point of view the admin team can either make interim payments or buy the loan units, but as it's discretionary there are no automatic triggers. I've spoken with andrewholgate as this sits on his desk at the moment and he's promised to come back with a comprehensive answer when he's back in work next week. |
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bigfoot12
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Post by bigfoot12 on Apr 16, 2016 21:28:19 GMT
Thanks Chris.
Looking forward to Andrew's reply, which I'm sure will be such that you can be flexible in the future as times dictate - that is fine. Your site says
"At its discretion, this fund will provide security of up to a specified percentage (per Account and as specified in the terms for each Account) of the total investments held within all protected Assetz Investment Accounts to absorb;
Payment delays of interest from a borrower where that sum arrives later than expected
Shortfalls in interest received from a borrower
Any possible capital losses if a loan defaults and the security when sold does not cover the loan balance remaining"
Sort of implies that if circumstances had allowed it at the time then interest would have been paid straight away.
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Post by profunder on Apr 16, 2016 21:47:34 GMT
Thanks Chris. Looking forward to Andrew's reply, which I'm sure will be such that you can be flexible in the future as times dictate - that is fine. Your site says "At its discretion, this fund will provide security of up to a specified percentage (per Account and as specified in the terms for each Account) of the total investments held within all protected Assetz Investment Accounts to absorb; Payment delays of interest from a borrower where that sum arrives later than expected Shortfalls in interest received from a borrower Any possible capital losses if a loan defaults and the security when sold does not cover the loan balance remaining" Sort of implies that if circumstances had allowed it at the time then interest would have been paid straight away. There is a legal issue which is the fund must be discretionary, however would be nicer to see a clear policy. Simplest policy would be to see the fund just buy any loans back which are more than 21 days late. The fund can sell these again to recoup money when back on track or collect income. However I'm sure the programming is more technical as the funds only exist inside fixed rate products. I'm not sure how that actually works, maybe the fund collects all interest and pays you a discretionary amount which is always 7% etc. In this case why would we care when the fund decides to buy the capital outstanding back or not, unless insolvent. Anycase there is a lot of regulation and rules which I don't know, so the answer is probably a completely different solution. Will be interesting to hear.
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mikes1531
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Post by mikes1531 on Apr 17, 2016 10:09:45 GMT
However I'm sure the programming is more technical as the funds only exist inside fixed rate products. I'm not sure how that actually works, maybe the fund collects all interest and pays you a discretionary amount which is always 7% etc. In this case why would we care when the fund decides to buy the capital outstanding back or not, unless insolvent. : The main situation I can think of where we would care would be if AC have suspended trading of that loan. In that case, without the PF taking the parts, any withdrawals we might wish to make would have to be funded by our QAA/GEIA/GBBA selling parts in good loans -- which would increase the proportion of the account remaining that's invested in suspended loans.
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davex
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Post by davex on Apr 30, 2016 15:17:25 GMT
From a technical point of view the admin team can either make interim payments or buy the loan units, but as it's discretionary there are no automatic triggers. I've spoken with andrewholgate as this sits on his desk at the moment and he's promised to come back with a comprehensive answer when he's back in work next week. Has this been answered elsewhere?
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Post by crabbyoldgit on Apr 30, 2016 19:36:18 GMT
If the WT loan updated last week does not manage to refinance in fairly short order the answer may given in a real life example as the borrower report they are unable to fund further repayments at present. Its certain to be represented in the geia I would have thought.
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am
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Post by am on May 1, 2016 16:42:41 GMT
If the WT loan updated last week does not manage to refinance in fairly short order the answer may given in a real life example as the borrower report they are unable to fund further repayments at present. Its certain to be represented in the geia I would have thought. The latest generation report says that generation is 90% of budget, and has been stable since June 2015. As far as I can tell this should have been sufficient to service the loan. "Assetz Capital will have the right to require the assignment of all income, which it will exercise to ensure FITs and PPA income are paid directly into the Trust account."
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Post by crabbyoldgit on May 1, 2016 17:36:40 GMT
Thanks am that is a very interesting quote the question is of course has AC historically applied that control over income or is it a right to be applied should problems occur. If the revenue is in the trust fund one would have thought it is insufficient to pay the next monthly instalment as AC is saying it intends to apply default interest at some level. To be honest this way beyond by knowledge and experience, maybe another person on this site can shed a little light and educate me a little more.
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am
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Post by am on May 1, 2016 18:35:11 GMT
Thanks am that is a very interesting quote the question is of course has AC historically applied that control over income or is it a right to be applied should problems occur. If the revenue is in the trust fund one would have thought it is insufficient to pay the next monthly instalment as AC is saying it intends to apply default interest at some level. To be honest this way beyond by knowledge and experience, maybe another person on this site can shed a little light and educate me a little more. My understanding is that it's a reserved right (probably involving legal costs in enforcement). Why I believe AC needs to understand is the nature of whatever cash flow problems the borrower is suffering. This is not the first time there have been problems; the lending community was rather irritated by the borrowers actions last time. If I recall correctly, FIT payments are paid quarterly, rather than monthly, so if there is insufficient working capital in the business the borrower might end up waiting for the FIT payment to pay the interest and capital repayment.
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bigfoot12
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Post by bigfoot12 on May 17, 2016 16:13:35 GMT
From a technical point of view the admin team can either make interim payments or buy the loan units, but as it's discretionary there are no automatic triggers. I've spoken with andrewholgate as this sits on his desk at the moment and he's promised to come back with a comprehensive answer when he's back in work next week. Any thoughts andrewholgate?
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bigfoot12
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Post by bigfoot12 on Jun 29, 2016 10:37:09 GMT
Bump
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