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Post by crabbyoldgit on Sept 8, 2017 18:43:34 GMT
s h homes , i dont understand this properly, we are asked to grant a corperate guarantee to a new loan which if goes wrong it is not the intention of the borrower not to use the asset to underwrite the default until i think prefential repayment of the existing two loans has occured. BUT !!! this is not assured, only hoped i think. Well the new borrowers who have the security in the corprrate garrentee may see things a bit different i would think ,should the s++t hit the fan.
This is way out of my present understanding and experiance, but at the moment ,no way.I hope for enlightenment from more skilled and experianced formulites.
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liso
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Post by liso on Sept 8, 2017 19:01:46 GMT
I see no benefit to us, the existing lenders. From me, it's a no!
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Esmeralda
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Post by Esmeralda on Sept 8, 2017 19:07:41 GMT
I'm a no too.
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marka
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Post by marka on Sept 8, 2017 19:19:11 GMT
I only have a nanopenny left in this loan after selling out a few weeks ago, but I'm going with no on prinicipal.
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Steerpike
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Post by Steerpike on Sept 8, 2017 19:43:09 GMT
I have a bit in this loan and it seems to me bl**dy minded to vote B, I see no reason to be obstructive and voted A, I struggle to see a point of principle that might cause me to vote B.
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Post by lynnanthony on Sept 8, 2017 20:01:34 GMT
I have a bit in this loan and it seems to me bl**dy minded to vote B, I see no reason to be obstructive and voted A, I struggle to see a point of principle that might cause me to vote B. Isn't the point of principle that we may be diminishing our security without any gain? If I understand the proposal correctly! It does seem to me to be poorly explained. Is the "new" borrower essentially the same as the "old" borrower but using another SPV? Or do I misunderstand entirely? Another principle is, if I don't understand it then I'll vote no.
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Steerpike
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Post by Steerpike on Sept 8, 2017 20:12:57 GMT
My reading of the "background" and "current position" is that #331 is coming to a successful close and there will be a surplus of funds that could be useful to help finance the next project, however, the existing first legal charge will remain in place until existing loans are paid off.
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ilmoro
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Post by ilmoro on Sept 8, 2017 20:42:58 GMT
Its not a legal charge so has no impact on our main security at all. We still have first call on the value of the property in the event of a default and a debenture over the companies assets.
AIUI CG means that in the event of the other company not paying a debt the lender can ask the company to pay and if they dont can pursue them through legal means. Given the low LTV, likely short term nature of the remaining term even with an extension this seems to be a very minor risk and I see no reason not to consent. Given the lender on the new loan is AC it is unlikely they would suddenly pull the plug to the detriment of lenders in other loans ... would be somewhat against their record.
Perhaps people should seek further clarification from AC so they do understand the relevance/implications of a CG rather than just vote no
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pikestaff
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Post by pikestaff on Sept 9, 2017 7:16:11 GMT
It is poorly explained in the voting requests but I agree with ilmoro that the guarantee does not really weaken our position. My personal view is that if AC want to grant the new loan in these circumstances they ought to invest a small part of their arrangement fee in a token rate increase for us. But I'm not going to the wall over it. I will vote A. |
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Post by crabbyoldgit on Sept 9, 2017 7:43:01 GMT
thanks to the more knowledgeable formulites i am now more reassured our security is uneffected and given the short window of risk in the two loans will vote A. The background to this is unusual and the notes from AC could have been a little fuller maybe ,but they have to tread a narrow path i guess around not giving advice.
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Post by lynnanthony on Sept 9, 2017 8:17:16 GMT
Its not a legal charge so has no impact on our main security at all. We still have first call on the value of the property in the event of a default and a debenture over the companies assets. AIUI CG means that in the event of the other company not paying a debt the lender can ask the company to pay and if they dont can pursue them through legal means. Given the low LTV, likely short term nature of the remaining term even with an extension this seems to be a very minor risk and I see no reason not to consent. Given the lender on the new loan is AC it is unlikely they would suddenly pull the plug to the detriment of lenders in other loans ... would be somewhat against their record. Perhaps people should seek further clarification from AC so they do understand the relevance/implications of a CG rather than just vote no Respectfully, if it has no impact on us why are we voting on it? If someone wants an action from me that offers me no benefit, it is up to them to explain it clearly, not up to me to chase around for clarification. IMHO.
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Post by chielamangus on Sept 9, 2017 9:07:11 GMT
It was not clear to me that the new lender would be AC or that we would be asked to subscribe to the new loan. I found the explanation confusing, could not see any possible benefit to AC investors, and wondered why the borrower could not wait until the waters are less muddy (ie when the properties are actually sold and repayment of the two loans was guaranteed). I voted No.
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ilmoro
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Post by ilmoro on Sept 9, 2017 10:39:17 GMT
Its not a legal charge so has no impact on our main security at all. We still have first call on the value of the property in the event of a default and a debenture over the companies assets. AIUI CG means that in the event of the other company not paying a debt the lender can ask the company to pay and if they dont can pursue them through legal means. Given the low LTV, likely short term nature of the remaining term even with an extension this seems to be a very minor risk and I see no reason not to consent. Given the lender on the new loan is AC it is unlikely they would suddenly pull the plug to the detriment of lenders in other loans ... would be somewhat against their record. Perhaps people should seek further clarification from AC so they do understand the relevance/implications of a CG rather than just vote no Respectfully, if it has no impact on us why are we voting on it? If someone wants an action from me that offers me no benefit, it is up to them to explain it clearly, not up to me to chase around for clarification. IMHO. Because it is a change to the companies circumstances and to the proposition originally put to lenders so theyve decided they should. They dont always and other platforms wouldnt. In particular circumstances it could lead to action against the company and a requirement for AC to enforce security if they felt the company could face winding up action for unpaid debts. However, even in such unlikely circumstances, ie it would be AC petitioning, the value of our fixed security is such that the potential for loss appears minimal. This is a good loan, a reasonable borrower and I see no good reason to reject their proposal, potentially damage the relationship and send them elsewhere. New loan might even be at a decent rate. Fair point, presumably they think they have.
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ilmoro
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Post by ilmoro on Sept 12, 2017 16:19:55 GMT
Some clarification has been provided in the Q&A.
Calling CG would be treated as a default; in the event of this occurring and recovery being initiated charges rank ahead of CG.
Still happy with A as this confirms my own take.
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