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Post by bengilbert on Sept 8, 2016 20:06:11 GMT
(BPF479) Sutton Coldfield Bridging Loan
There is an update to this loan which I haven't seen covered elsewhere: UPDATE 05/09/16: Borrower has refurbished the property and has applied for the re-finance this week with Lloyds.
MoneyThing is there a better way that loan updates like this can be flagged to lenders, perhaps by email, or perhaps via a loan updates thread, perhaps? (apologies if I've missed either!) Do you have a 'best guess' on if the re-finance application is likely to be approved, and when this is likely to repay? It's very early in the process and so we have no detailed timescale on the refinance yet. I would not expect this loan to be repaying in the next few weeks at a minimum. (Loan end date is mid January 2017 for reference) On the Broadoak loans, we do a monthly update of our loans posted in the forum which included this information. We'll always wait for information to be updated on the site first, though, since not all lenders are readers of the forum.
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Post by bengilbert on Sept 6, 2016 9:58:43 GMT
. . . . LTV around 66% against the current valuation, . . . . . . LTV on tranche A might be 44% with tranche B making up the balance to 66%, . . . Hi bengilbert, Am I understanding this correctly that the 44%-66% split will add up to the 66% LTV? (i.e. parts of the 66%LTV) As an example, if the security was worth £100,000, tranche A would be for £44,000 and tranche B for £22,000.
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Post by bengilbert on Sept 5, 2016 21:32:16 GMT
Basically I like the idea (but I think pricing might be interesting.....). Two questions:- 1. What would you do if demand is skewed heavily one way or the other? 2. It's quite short term, leave aside mrc's comments about it presumably being weather proofed and so actually close to completion what happens if something blows up out of nowhere and causes say a two month delay (eg ~40% of the originally expected loan term)? Here I'm thinking more about project risk than financial risk. Would you apply penalty rates? Would they be the same, or differ by tranche? 1. Hold on to whichever tranche doesn't sell, or find other investors for it, and take the difference in demand into account for future loans where we look to do something similar. 2. Good question. Usually, if a borrower is in default, lenders would receive 1.5% per month whilst the loan is in default. We'll think about whether this needs to be amended so the different tranches are paid different default rates. We would, however, do our very best not to get into this situation, by building some contingencies into the loan term and keeping close track of progress.
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Post by bengilbert on Sept 5, 2016 21:26:06 GMT
Would they both be listed at the same time? I ask because, without further detail, I'm not sure which option I would go for. However, a simultaneous listing would provide a very quick indication of which tranche is the more popular and thus increase its secondary market potential. One tranche could sell very quickly, the other may hardly move and you could be left holding a big pot. Yes, they would be listed at the same time. There may turn out to be a difference in demand for the different tranches. This would be useful for us to know, so that we can better pitch it in future deals. Although it would be ideal for investors as a whole to be equally happy with the two tranches, we're not too concerned about being left holding some of the investment, since both tranches will be priced at levels that we or our other investors are happy to hold.
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Post by bengilbert on Sept 5, 2016 21:20:23 GMT
Thanks very much for all the comments, we'll take them all on board. I realise that the discussion can only be rather vague until you've had details of the specific loan, but I'm glad that generally people like the idea. We'll come back with more information once we're closing in on completion of the loan.
Appreciate you taking the time to give your views.
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Post by bengilbert on Sept 5, 2016 13:52:58 GMT
We're getting close to completion on a sizeable loan, some of which will be offered on MoneyThing. We'll provide more details shortly, but the outline is: loan secured on a residential development close to completion with most flats presold and substantial deposits taken, LTV around 66% against the current valuation, redemption from the proceeds of sales once the development is completed (expected by the end of January 2017).
Although Broadoak will have a first and only charge on the security, we're thinking about offering it in 2 tranches on MoneyThing, a lower risk tranche A and a higher risk tranche B ranking behind tranche A. LTV on tranche A might be 44% with tranche B making up the balance to 66%, and the interest rates might be 10% on tranche A and 13% on tranche B. Broadoak would as always be investing 5% of the loan on a first loss basis (subordinated behind both tranches). The two tranches would make it easier for investors to find something that best matches the risk and return profile they want (some looking for low LTV, others for a higher yield). Anyone who just wants it as a straight 66% LTV loan can simply invest in both tranches (with a 2:1 ratio between tranche A and tranche B, giving 11% yield).
Is this something you'd like to see? Anything you'd like us to take into consideration if we go ahead with this?
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Post by bengilbert on Sept 5, 2016 13:49:06 GMT
Upcoming loans
Tenanted apartment block in Luton with potential to build additional block on the site. Loan amount £373,500, LTV 69% (without attributing any value to development potential), 6 month term, 11% interest rate. Expected to be listed w/c 12 September.
Current loans
B******l Road, Sandbanks (BPF373 & 383) Planning have requested a Tree report which they are hoping to instruct next week. This will take around three weeks to come back. Planning have indicated they will allow 21 units on the site which will increase the GDV and security value. The borrowers are likely to request a 3 month extension (current due date 30/9). If the extension is granted, Broadoak will look to buy out any investors who wish to be repaid on the original due date.
Residential Development - Streatham (BPF397) Offers have been received on the property for close to the asking price, which would comfortably allow the loan to be repaid. Borrower meeting with the bank to discuss re-finance to give additional time to achieve a higher price.
Sutton Coldfield Bridging Loan (BPF479) Borrower has refurbished the property and has applied for the re-finance this week with Lloyds.
M***** H*** Development Loan (BPF407, 501 & 526) Work proceeds on the main building. A further tranche was drawn down last week (no availability remaining on the platform). The borrowers have been working with planning consultants on the planning application for the adjacent development site (also part of our security) and expect to go for planning in 4 weeks.
W***n Hotel Development (BPF528) Loan drew down last week.
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Post by bengilbert on Aug 30, 2016 20:24:21 GMT
It's unfortunately still in the hands of the lawyers. We've been told they are all working towards completion on Tuesday, which would allow it to be listed a day or two after, but I don't want to make any promises. Really sorry this has taken so long. Is there any draft information available on this loan? There's a couple of good loans going live today but I'd like to save some money for Wigan if there's any useful information available. Thanks Draft info is now going up, with the loan to go live tomorrow.
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Post by bengilbert on Aug 30, 2016 10:40:22 GMT
It's unfortunately still in the hands of the lawyers. We've been told they are all working towards completion on Tuesday, which would allow it to be listed a day or two after, but I don't want to make any promises. Really sorry this has taken so long. Is there any draft information available on this loan? There's a couple of good loans going live today but I'd like to save some money for Wigan if there's any useful information available. Thanks We're just waiting on confirmation from the lawyers but if drawdown is confirmed, draft info should go up a bit later today.
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Post by bengilbert on Aug 27, 2016 19:05:46 GMT
Is this one still looking likely for Tuesday Ed? I suspect that means aiming for drawing down on Tuesday, live on the platform Wednesday. Post above is in answer to this.
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Post by bengilbert on Aug 27, 2016 19:04:47 GMT
It's unfortunately still in the hands of the lawyers. We've been told they are all working towards completion on Tuesday, which would allow it to be listed a day or two after, but I don't want to make any promises. Really sorry this has taken so long.
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Post by bengilbert on Aug 12, 2016 15:55:49 GMT
Thank you for the comments. I came to this as a lender myself and I know how important it is to be kept informed. It's easy to worry when you don't get any updates, even when there isn't much to report and/or there's nothing you can do about it. We'll do our best to keep this up.
I'd like to apologise that the hotel loan hasn't yet drawn down. We're just waiting on one thing from the solicitors of the hotel brand under which the hotel will be operating, and despite chasers from us and the borrower throughout the week, we're still waiting on it. I very much hope it will come through next week.
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Post by bengilbert on Aug 10, 2016 9:37:23 GMT
We'll be giving monthly updates on all our live loans. The information should have gone out in an email but in case anyone didn't receive it, it's posted below.
B******l Road, Sandbanks (BPF373 & 383) Borrower has spoken to planning and they seem happy with the scheme which has now been submitted. We still do not know when planning will be granted as they cannot give any timescales. The borrower is hoping within the next 3 to 4 weeks.
Residential Development - Streatham (BPF397) All works completed and awaiting sale particulars showing property on the market for £625,000.
Sutton Coldfield Bridging Loan (BPF479) Borrower is still refurbishing the property before applying for the re-finance.
M***** H*** Development Loan (BPF407 & 501) Work is proceeding. The latest valuation puts the site value at £6,220,000, increased from £5,860,000 at loan drawdown. A further drawdown was listed on the platform on the 8th August (BPF501).
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Post by bengilbert on Jul 25, 2016 8:48:54 GMT
A quick follow-up: the key point is that Broadoak's 5% first loss holding is NOT a second charge subordinated to ALL the first charge holders. I think that's where the confusion may have come from.
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Post by bengilbert on Jul 25, 2016 8:46:06 GMT
The 5% applies only to investments listed on MoneyThing, and is there solely for the protection of MoneyThing investors (no other investors would have a claim on this money). Hope that helps. ed Just looking at this and I'm a little confused. The LTV seems to assume that the whole 2m lent has 5% on a first loss basis, not just the 750K lent by MT. Not 100% sure of the maths but I think that for a 100% recovery of the 2m lent, we at MT require that: 1.25m + (0.75m x 0.95) = 1.9625m is recovered therefore LTV = 1.9625/3.26 = 62.1% The stated LTV is calculated as (1.25+0.75)*.95 = 1.9m recovered therefore LTV = 1.9/3.26 = 60.1% Or am I misunderstanding the calculation behind the LTV. Morning, The 5% first loss tranche that we hold applies only to the MT investment. Here's one way of looking at the calculation: -MT has lent £750,000, of which (750000 * 0.05) = £37,500 is from Broadoak. -as part of total lending of £2,000,000, MT has a claim on (750,000/2,000,000)= 37.5% of the security -for MT lenders to recover 100% of capital, they need to recover (750,000-37,500)=£712,500 -so 37.5% of the security has to be worth £712,500 for lenders to recover 100% of capital -so the total security has to be worth (712,500/0.375)=£1,900,000 -which gives an LTV of (1,900,000/3,160,000)=60.1% Hope that helps make things clearer.
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