blender
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Post by blender on Apr 5, 2017 12:27:44 GMT
Think it was IO rather than amortising. Yes, sorry I missed that on elliottm post. Best to read the full proposal later.
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kaya
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Post by kaya on Apr 5, 2017 14:27:18 GMT
Sorry to look on the gloomy side, but what happens if, during dismantling, the aircraft catches fire and is destroyed? What happens if a dodgy airport employee moonlights with his van piled high with the bits & pieces? Only supposing of course...
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blender
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Post by blender on Apr 5, 2017 15:02:39 GMT
... What happens if a dodgy airport employee moonlights with his van piled high with the bits & pieces? Only supposing of course... Do you think he would have a container somewhere to store the knocked-off parts?
More seriously, I would hope there would be some insurance.
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stub8535
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personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Apr 5, 2017 16:15:24 GMT
The market for second hand parts is strong. I used to trawl for geriatric bits for a repair and overhaul shop. Typical charge is 10 x spares market cost from oem. Concorde used to be think of a number according to the items mass x several 1000% as a starting negotiation point.
As the aircraft age the oem suppliers lose the ability to manufacture, lost hardware new machinery incapable of manufacturing component etc. So looking forward to this loan as I never saw an owner of the stripping companies looking down at heel on the race or golf course.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Apr 5, 2017 16:30:41 GMT
Well, I know serviceable parts can be worth a fortune, but how much this is worth in total is a mystery to me. It's going to be interesting reading in the loan description. This will be one loan were the actual value of the asset in its current form is pretty irrelevent. If that's true what is to stop someone borrowing an excessive amount and just handing back the asset?
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stevio
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Post by stevio on Apr 5, 2017 16:58:42 GMT
This will be one loan were the actual value of the asset in its current form is pretty irrelevent. If that's true what is to stop someone borrowing an excessive amount and just handing back the asset? Be interesting to see how AB structure this one - guessing there might be some funds added by the borrower to help increase the security or a claim over the companies profits via the debenture
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Apr 5, 2017 17:18:58 GMT
Scratching my head on this one but I think I'll go for it; the Borrowers having a good track record in dismantling at profit comforts me. And I do like to feel comfortable.
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hazellend
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Post by hazellend on Apr 5, 2017 17:33:45 GMT
Seems okay but not really interesting to me.
Don't like the quarterly payments, although would have accepted at a higher rate and longer loan.
No valuation as to the sum of the parts, LTV as the craft stands is 100%. This is sort of like a DFL loan on saving stream.
No instant returns?!?
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madpierre
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Post by madpierre on Apr 5, 2017 17:35:11 GMT
Yes the Borrowers will make a handsome profit and are on to a winner with this funding set up
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stevio
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Post by stevio on Apr 5, 2017 17:48:15 GMT
ablrate - What was the purchase price of the aircraft? Is this £400k as in the cost of asset acquisition? - How was the 75% LTV calculated? This would give a value of more than £441K - if correct, what is this made up of? - Is A A Ltd just an SPV or does it have other assets that could be claimed under the debenture if needed? If so, what assets? Personally I can't see the appeal in this at 10%, interest only, fairly high LTV (which is currently unclear) and 12m duration
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david42
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Post by david42 on Apr 5, 2017 17:49:23 GMT
No valuation as to the sum of the parts, LTV as the craft stands is 100%. This is sort of like a DFL loan on saving stream. No instant returns?!? The borrowing proposal, downloadable from the documents section, says there are instant returns. stevio watch the currencies. The light blue table on page 6 of the borrower proposal says the purchase price is $400k, not £400k. Some of the documentation is in pounds and some is in dollars.
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stevio
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Post by stevio on Apr 5, 2017 17:50:29 GMT
Yes the Borrowers will make a handsome profit and are on to a winner with this funding set up That is the hope, but in the worst case scenario listed, they will just about break even after interest and AB fees
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stevio
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Post by stevio on Apr 5, 2017 18:10:47 GMT
No valuation as to the sum of the parts, LTV as the craft stands is 100%. This is sort of like a DFL loan on saving stream. No instant returns?!? The borrowing proposal, downloadable from the documents section, says there are instant returns. stevio watch the currencies. I think the purchase price was $400k not £400k. Just off to check Yes your right So presuming USD and not Hong Kong Dollar (I mention it as the company address is in Hong Kong) Security $400k = £320,800 vs loan of £331k (are they maybe borrowing an additional 10k to pay the first 10k AB fee?) EBITDA $55k = £44,110, $107,250 = £86,014, $158500 = £127,117 Borrowing Costs AB Fees 2x £20k + 10% interest £33,100 = £53,100 (or maybe 10k less if already borrowed and paid first 10k AB fee out of loan) So worst case the borrower makes a loss/breaks even I do remember container loans, purchased at 100% LTV, to potentially sell on for a profit. I hope this is not in a similar vein
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blender
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Post by blender on Apr 5, 2017 18:30:05 GMT
Also the guaranteed interest is only three months, and so this can be repaid in three months. Presumably the dismantling takes 3 months and the rest of the time is just in case it takes longer to sell sufficient parts This does not seem a particularly attractive loan from Ablrate. We expect asset backed lending, but this is an interest only loan on an asset which would not be in any state to possess even before the first repayment is made. May have a little for diversity. I hope there are better loans waiting in the wings.
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Post by ablrate on Apr 5, 2017 18:59:32 GMT
The borrowing proposal, downloadable from the documents section, says there are instant returns. stevio watch the currencies. I think the purchase price was $400k not £400k. Just off to check Yes your right So presuming USD and not Hong Kong Dollar (I mention it as the company address is in Hong Kong) Security $400k = £320,800 vs loan of £331k (are they maybe borrowing an additional 10k to pay the first 10k AB fee?) EBITDA $55k = £44,110, $107,250 = £86,014, $158500 = £127,117 Borrowing Costs AB Fees 2x £20k + 10% interest £33,100 = £53,100 (or maybe 10k less if already borrowed and paid first 10k AB fee out of loan) So worst case the borrower makes a loss/breaks even I do remember container loans, purchased at 100% LTV, to potentially sell on for a profit. I hope this is not in a similar vein Will take a look at the questions in the morning... but just to clarify one point.... We are not getting 2x £20k....
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