jjc
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Post by jjc on Jul 3, 2015 16:28:45 GMT
My numbers seem to concur with chris (who will have a more complete picture as I can only see what is visible). Which FWIW in the interests of transparency are: 13 Feb – 6k available (last time anything was visible until 1st April) 1st Apr – 72k 2nd Apr – 52k (ie 20k sold in prior 24 hours), then a small trickle down till 11th Apr – 34k (11k sold in the prior 24 hours) Then up again to 41k on 15/4 & trickle down thereafter till 29/4 – just 1.5k (20k sold in the prior 24 hours) 29/5 – 15k (put on the market & sold out on 4/6) 8/6 – 26k (put on the market & sold out on 13/6) 15/6 – 30k (put on the market & sold out on 19/6) 25/6 – 39k (put on the market, only 8k visible next day, 17k on 27/6, 10k on 29/6, 17k on 30/6) When I say sold/put on the market that’s an assumption ofcourse, it could be large lenders simply adding/removing units from the market. Without any of this I make it 180k sold of this loan from 1st Apr to end of June. Real numbers could well be higher ofcourse (my figs are just once a day random snapshots which might well miss the peaks, & don’t track non visible volumes traded.) Chris will have a better idea on whether the trading volumes are anomalous. The dates marked in red presumably those worth focusing on first. I’m confident AC will clear this question. My personal concern is more on how the loan could have got to where it is, & why ACTCL were dozing on watch. Not to mention what do AC propose to do now?
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jjc
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Post by jjc on Jul 3, 2015 11:53:30 GMT
From a post further up this thread on 15/10/14: (“Playing games with lenders”) But I am surprised that no questions were asked (pre loan completion) about the very questionable behaviour of the previous accountant. He contrived to extort (legally of course) benefits from Santander by playing games with the loan repayments. This guy was a member of the senior management team. Surely the hospital-bound director would have known - or would have been told - that such serious machinations were being undertaken on his behalf? It is beyond credible that the accountant would have taken these activities on himself without any discussion with other managers or with relatives of the director.
I am left wondering if there might be a culture in this business whereby managers might be tempted to play games with AC lenders over the next 36 months.
markdirac – I’ve been in two minds about this loan for some time. I had the same concerns about the accountant’s monkey business at the time, but assumed there would have been some mitigating circumstances (hence why Santander agreed to the debt forgiveness) & being a bit of a sucker for “ethical” businesses anyway bought into the loan. Given recent events I think we do need to know more about the company’s management & whether lenders should be concerned about their handling of creditor relationships, perhaps repayments are seen as an (if possible) avoidable optional. Oh & recent performance on their new ventures. An urgent clarification from AC as to what responses they’ve had from the borrower to date aside, my feeling is a quick & tough action asap now (lender vote appointing receivers) will be needed to nip things in the bud. Eco-friendly products, ethical companies bla bla aside if the management is a tricky bunch we need to show our teeth pretty sharpish.
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jjc
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Post by jjc on Jul 3, 2015 11:42:59 GMT
gnasher, I’m personally less inclined to think there has been asymmetry in the info provided to lenders – it seems we’ve all been treated equally poorly.. not sure how much satisfaction to take from that! I’m more concerned as to what happened internally to allow this situation to arise, both as a lender & a future shareholder. Hence my questions on the various layers, checks & balances that presumably were in place, any one of which might have brought the issue to light. oldgrumpy, I still have faith in AC. That doesn’t mean when apparently serious mistakes are made we shouldn’t be asking uncomfortable questions, quite the opposite actually.
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jjc
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Post by jjc on Jul 3, 2015 10:51:57 GMT
Gnasher, it looks like the first assymetry concerns AC (& perhaps ACTCL) knowing this loan was behind its repayments & lenders not knowing.
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jjc
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Post by jjc on Jul 3, 2015 10:41:22 GMT
A most troubling situation, with lots of things apparently gone seriously amiss that need explanation. For example:
1. why did the system not automatically suspend the loan when the first (then 2nd, then 3rd) repayments were not made on time? 2. why were lenders not informed each time? 3. why was the situation not flagged up on the loan notifying all AC lenders (ie also those those without a stake in the loan)? 4. why - & on what basis – did Assetz Capital Trust Company authorise release of lender security when the first (then 2nd, then 3rd) repayments were made out of the buffer they were responsible for protecting (which note should be done independently of AC management) 5. why were repayments from the buffer made on pretty much the very day lender repayments should have been made (30/4, 1/6, 30/6) ie apparently without allowing time for the borrower to be contacted (to identify reasons for late payment & receive notice as to when the situation would be rectified), lenders to be notified, ACTC to perform whatever checks/duties they deem necessary before authorising release of lender security 6. shouldn’t the system repayments clearly show when a repayment has been made from a buffer? 7. given default occurred at the end of April(?), shouldn’t interest be accruing at the default rate from that date on, & why has it not been doing so automatically on AC’s system? On what basis are AC now proposing that default interest should accrue only from 2nd July? 8. what communication has there been between AC & the borrower since the 1st repayment was missed, & what has the borrower told AC to this regard?
An extract from AC’s T&C’s:
13. Default Procedures 1. If the Assetz Agent becomes aware of a default in the payment of any principal, interest or fee payable under any Loan Agreement or if it otherwise receives notification of an event of default under the terms of any Loan Agreement, it shall promptly: 1. notify the relevant Lending Syndicate Members of the relevant circumstances; and 2. put together a suitably qualified default management team comprising a lawyer, an insolvency practitioner and any other professional deemed by the Assetz Agent to be required, whose task it shall be to produce a report on the default situation and a recommended course of action. 2. The Assetz Agent shall not implement any of the following proposed courses of action without having the consent or deemed consent of the relevant Lending Syndicate Members in relation to the proposal: 1. the commencement of any enforcement action or legal process against a Borrower; 2. the release of any security (save where the relevant Loan has been repaid in full); 3. the issue of any waiver letter; or 4. the restructuring of the Loan or security.
as to the trustee: THE ASSETZ CAPITAL TRUST The executive directors of the Assetz Capital businesses do not have any control of the Trust, in order for the Trust to operate impartially. ***** ********, through their subsidiary ***** ******** Trust Company Limited, acts as a corporate director of Assetz Capital Trust Company Limited.
I am particularly concerned as to the apparent failure of ACTCL – an independent body responsible for holding lender’s security – to protect our interests, allowing release of the buffer on at least 3 occasions without lenders having being consulted – or even notified – to this regard. What’s the point of having a trust if they can’t act as another layer of protection – completely outside the control of AC – to ensure nothing can slip through the net? Shouldn’t a statement from ***** ******* explaining what actions were taken by them be necessary now?
My records show that on 1st April 72k of this loan’s units were put up for sale (the first time units were visibly available since mid-Feb), & sold down over the course of April (when the loan went into default). A coincidence perhaps, clarity would nonetheless be welcome.
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jjc
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Post by jjc on Jun 23, 2015 23:02:58 GMT
Agree with samford71. Much as I’d like AC to have a freer rein (& think it will be inevitable longer term) over the next couple of years the flow of new lender money will dwarf dealflow. It would be all too tempting for a platform to do just enough (rather than best possible) in recoveries, knowing there will always be plenty of fresh money ready to step in. Automated voting is a must, good to hear it’s on the way. As the loan book enlargens & votes become more frequent it may be that lender participation in votes (not to mention exposure per loan) diminishes. That could be the right time for AC to propose loosening the reins, if winning votes consistently carry say only 20% of lender support that in itself would suggest it’s time for a change. For the moment though I wouldn’t mind having a small say in loans on which I may have a large 4 or 5 fig exposure. I suspect larger lenders - & underwriters - might feel the same way..
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jjc
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General P2x Discussion
P2P ISA
Jun 23, 2015 17:32:26 GMT
Post by jjc on Jun 23, 2015 17:32:26 GMT
I was thinking more in terms of how they might appeal to the masses (& hence the impact they could have on money flowing into the platforms). This is the sort of thing that could kick-start P2P in a big way, well before individual investors start popping their direct p2p holdings into isas. There’s close to £1bn from those 5 funds alone, pre-ISA land (granted, some/much going to P2P platforms abroad), not hard to imagine it growing further very quickly.
For a discerning manual p2p investor I agree they are less appealing. That said (I go from memory here having looked at Ranger & VPC some months ago) the starting point IIRC for some of these funds’ investments can be in the 20-50% range, hence the net targeted dividends (after fees) of up to 10%.
You’ll still have to absorb the premium & I agree it’s always wiser to assume prices will return to NAV & build that into yr expected returns. But I’m not so sure the premiums will fall much (until everything does).
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jjc
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General P2x Discussion
P2P ISA
Jun 23, 2015 8:41:17 GMT
gb007 likes this
Post by jjc on Jun 23, 2015 8:41:17 GMT
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jjc
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Post by jjc on Jun 18, 2015 11:28:06 GMT
I might well be wrong, but I was under the impression that as reported here onshore wind farms will be excluded but individual turbines on a farmers land will still be allowed, and it is the latter that we deal with predominately. Can anyone confirm or deny this ?
The announcement today relates to wind funded by the RO (Renewables Obligation) scheme, not the FIT (which is the scheme used by smaller / single turbine deals), your recollection is correct mrclondon. That doesn't mean smaller WT deals are out of the woods yet though. The government's reforms are part of a wider package to control spending on renewables, & a reform of the FIT scheme is also expected. How this will affect FIT rates for small wind is an unknown at this point. It could be that a tighter rein on RO spending will enable more room for deployment of small wind on the FIT scheme, on the other hand the pressure on the Levy Control Framework (which is the total pot for all green energy schemes), together with misguided political objectives (onshore wind is also popular amongst Tory voters, something the government still hasn't seem to have grasped..) & the protection of large energy operators' interests, could mean everything is cut. As background, there is also a separate CfD (Contracts for Difference) scheme now for large renewables which also needs to be funded by the LCF. The government is pushing CfD's strongly (it will basically replace the RO), whilst part of this is understandable in that it obliges renewables to compete for funding a large amount of CfD funding has been conveniently reserved for offshore wind & other much more expensive renewables. What has happened is that with onshore wind & solar proving so cost competitive & deploying very quickly, the very large offshore wind operators (who have had little success to date reducing costs) have successfully lobbied the UK government to reserve a large amount of capacity for them, & put the brakes on onshore & solar, to enable them to deploy meaningful volumes of offshore by 2020. Critics would argue this makes a mockery of the government's stated aim to support decarbonisation at the lowest possible cost. Another aspect worth watching is planning. The government have said they want local communities to have the final say on onshore wind in their area & there will be changes made to the planning process. This could be good news for small wind, if local support for say single turbine deals is easier to obtain than for larger wind farms. Imo much will depend on the FIT rates however, if these aren't viable even local support won't be enough to get them off the ground. Last angle, worth watching what happens in Scotland (where a large amount of onshore wind has been deployed & is still in the pipeline). The SNP are against the government's blocks on onshore wind, this could have an impact on things.
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jjc
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Ablrate (ABL) in Administration
Feedback
Jun 18, 2015 11:18:43 GMT
Post by jjc on Jun 18, 2015 11:18:43 GMT
Good to see a new loan. LTV calc should be made clearer. 80% suggests the containers are valued at £1637.50 each (x50 = £81.875) which is higher than the price (£1450) the borrower sold the first 30 for. He'd need to sell the remaining 20 at £1919..
In the event of default what's the penalty interest rate?
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jjc
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FundingSecure (FS) in Administration
Lancaster Hotel
Jun 8, 2015 10:24:55 GMT
Post by jjc on Jun 8, 2015 10:24:55 GMT
If not misread p14 of the VR suggests the hotel was recently sold (to the existing owners?) for £850k (which if for all 55 rooms = 15k/room). I'm surprised the VR hasn't mentioned the values obtained for the other 44 rooms (£39.950-58.950 averaging at 50k presumably relates to the Travelodges)? fundingsecure perhaps you could clarify
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jjc
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Post by jjc on May 15, 2015 12:38:30 GMT
One of the biggest problems with lending on FS is that (if you are looking to deploy meaningful sums) it is in practice impossible to avoid having a lumpy portfolio, with exposure on some loans much bigger than others. Something goes wrong on just one of these & your entire platform returns get severely clobbered. A SM would be the most obvious way to allow lenders to manage their exposure, but unless deal flow grows significantly it’s likely to help mainly by limiting our total platform exposure (not what many lenders will want). A PF could help reduce losses if it can be funded sufficiently. I see at least 4 ways of doing this: 1. borrower contribution 2. FS contribution (initial seeding) 3. surpluses from any sales at auction 4. borrower charge for going into default All should be possible (3 perhaps harder as not usual pawnbroking practice, maybe there’s a way around this? 2 is being done already albeit on a discretionary basis) & would have the additional knock-on benefits of focusing the borrower’s mind on making timely repayment (reducing losses) & encouraging the sale of assets at higher prices in auctions (enhancing recovery). Downside being that it would probably have to be applied to all loans (or at least non-property deals), & perhaps lower our rates. I personally might well prefer a SM solution (& increased dealflow) instead. ramblin rose raises interesting questions. I see FS as continuing to be a niche platform (yes they will scale with property but nowhere near like proper P2P scaling in ISA-land), so don’t see it as imperative they try to build a PF to capture a truly mass market. They simply need enough lending capacity to match their projected deal flow (allowing for lender leakage ofcourse). There will always be a difference between platform headline & net rates, the problem with FS is that this can be huge & they don’t offer investors the tools to manage this. We basically have to take a punt (very quickly, sometimes seconds) & are then all locked in for the duration of the deal, no way out or in for anyone. A dumbed down market is not a good place for discerning investors. You’d think, with the prospect of a steady stream of new lenders entering P2P, it would be in FS’ interest to offer us tools to manage our risk, yes we’d be offloading some of this to newer “dumber” investors but that’s how they will learn & in turn offload to other even newer ones, in an ever-growing loop with all of us having the ability to reduce our exposure on any single loan, squeezing out the big dents on headline rates & inviting new lenders in to take on quickly diversified (means lower risk) portfolios. No tools & I see only a loop of dumb investors replaced by other dumb investors, each getting out when they realise the net returns are nothing like what they were expecting. Valuations – sqh’s suggestion is worth a thought. Another idea could be (for the lumpiest assets, such as art & perhaps oriental carpets) for LTV to be expressed on the recent realised auction sales price of a similar asset if lower. It shouldn’t involve much/any significant more workload for FS, the valuers they’ll be talking to will have this info already.
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jjc
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Post by jjc on May 15, 2015 9:49:17 GMT
Yes mikes1531 that 3rd option was as you guessed (not always poss/easy as you say, a partial rollover feature would solve this). Just to clarify the valuation on the carpets has not increased, the "in excess of" 100k statement was actually also on the original loan's email, so no change. Would have preferred a copy of the VR (even redacted) to be uploaded for this loan, transparency always welcome. A magic carpet ride into the unknown it is then
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jjc
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Post by jjc on May 14, 2015 18:25:46 GMT
One of my thoughts exactly bugs4me. The "in excess of" is intriguing, is that due to something new FS have heard (eg from discussions with outlets when loan defaulted) since the loan was last issued or something else? You'd expect a supposed "increase" in an asset's value would be explained. The VR doesn't say who valued them or specify values for each of the 6 carpets (or even the 6 carpets as a whole..), in fact the only "valuation" I can see is FS' 100k mentioned on the original loan together with "very fine" condition. My grandma could do that.
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jjc
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Post by jjc on May 14, 2015 17:44:00 GMT
Looks like this loan is renewing after all. All accrued interest to be paid tomorrow. Of the 3 options
1 – get out 2 – rollover 3 – reduce your stake
how are others feeling about this?
I’ve personally never done any dd on the value of these carpets, LTV lowish (but we’ve seen what can happen at 40% on other special assets), & given it would seem the borrower has been strapped for cash (interest for renewal was only 3k) can imagine it’s quite likely to default next time – so what we can expect from an auction sale rather important. Any thoughts?
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