cwah
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Post by cwah on Jan 20, 2019 19:47:38 GMT
Hello
They are doing a 3rd renewal on this property. It says LTV of 36% which seems good but not sure if its based on residual value?
Any of you know what it would sell for if it was a fire sales?
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rogerthat
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Post by rogerthat on Jan 20, 2019 20:08:59 GMT
<link to previous thread removed as threads have now been merged>
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cwah
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Post by cwah on Jan 20, 2019 20:11:52 GMT
<link to previous thread removed as threads have now been merged> Thanks for the link. Any opinion on how much it would worth on fire sale?
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rogerthat
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Post by rogerthat on Jan 20, 2019 20:13:13 GMT
sorry no..much more 'qualified' on here than me...one will be along soon enough
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james21
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Post by james21 on Jan 21, 2019 8:12:57 GMT
"In the event of a default, this loan will rank ahead of all other tranches and the supplemental loan that was raised" For that reason I think its safe but would not want be in the ones that rank behind and definitely not be in the supplemental
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adrian77
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Post by adrian77 on Jan 21, 2019 10:33:27 GMT
looking at comparable sites I think this developer is playing Russian Roulette with FS lenders' money. The land seems to contain a former refuse tip which can be a complete nightmare ref the footings etc (I speak from experience). The valuation seems far too high to me.
Good news is that this loan ranks higher than the other tranches - this loan may be worth a punt if you ask me but not the secondary and supplemental loans!
However much is £915K going to attract in interest over a year - best part of £200K? I think this one has still not got final planning permission?
Another interesting one...
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cwah
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Post by cwah on Jan 21, 2019 13:29:25 GMT
My question really is...
If the planning permission is refused and a fire sale were to happen....
How much would it sell on open market? How likely would lender loose money?
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09dolphin
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Post by 09dolphin on Jan 21, 2019 19:04:07 GMT
In view of the "generous" LTV that FS normally use I would have complete confidence that, in a fire sale, the asset would only achieve up to 70% of the valuation and perhaps significantly less. However, as the interest has been paid twice in the past, I would be reasonably confident that the borrower does hope to proceed with the development when planning permission is granted. Perhaps the most significant word in the above comment is "hope". If planning permission is refused or there is some sort of Brexit recession it's going to be a huge gamble.
The other loans on this asset I wouldn't touch with a bargepole as they are far too risky for me.
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bg
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Post by bg on Jan 21, 2019 19:44:35 GMT
In view of the "generous" LTV that FS normally use I would have complete confidence that, in a fire sale, the asset would only achieve up to 70% of the valuation and perhaps significantly less. However, as the interest has been paid twice in the past, I would be reasonably confident that the borrower does hope to proceed with the development when planning permission is granted. Perhaps the most significant word in the above comment is "hope". If planning permission is refused or there is some sort of Brexit recession it's going to be a huge gamble.
The other loans on this asset I wouldn't touch with a bargepole as they are far too risky for me.
I'd normally agree that having interest paid on a renewal gives me confidence that the borrower is full on committed with pushing on and completing the development. I always see that as a positive sign (unlike some others). In this case however it is worth noting that the interest has been paid by issuing a supplemental loan...this means the borrower doesn't have to put any extra cash in. This doesn't necessarily mean anything bad but in this instance I wouldn't take it as a positive sign.
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cwah
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Post by cwah on Jan 22, 2019 8:11:45 GMT
In view of the "generous" LTV that FS normally use I would have complete confidence that, in a fire sale, the asset would only achieve up to 70% of the valuation and perhaps significantly less. However, as the interest has been paid twice in the past, I would be reasonably confident that the borrower does hope to proceed with the development when planning permission is granted. Perhaps the most significant word in the above comment is "hope". If planning permission is refused or there is some sort of Brexit recession it's going to be a huge gamble.
The other loans on this asset I wouldn't touch with a bargepole as they are far too risky for me.
With a 36% LTV, getting 70% back from 1.5m is still largely enough to cover the £500k loan + interest... How come it could go so high?
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cwah
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Post by cwah on Jan 26, 2019 12:30:46 GMT
I'm thinking to buy some because of the low LTV at 36% and ranking above the other loans...
Anyone else?
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jonno
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Post by jonno on Jan 26, 2019 13:26:27 GMT
Simple one for me. It's on Funding Secure therefore I wouldn't touch it with the proverbial.
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Post by mrclondon on Jan 26, 2019 14:57:44 GMT
Whilst the site already has outline planning permission (formally granted in Jan 2018) a new application for full permission was submitted Q4 2018 for a higher density build proposal. (Link on DD Central for those with access). All the documentation looks high quality, esp the 'Design and Access Statement'.
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cwah
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Post by cwah on Jan 26, 2019 16:02:11 GMT
Whilst the site already has outline planning permission (formally granted in Jan 2018) a new application for full permission was submitted Q4 2018 for a higher density build proposal. (Link on DD Central for those with access). All the documentation looks high quality, esp the 'Design and Access Statement'. Yes it all looks good. They seemed to have worked decently fast as well to clear the site.
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Post by mrclondon on Jan 26, 2019 16:14:02 GMT
Whilst the site already has outline planning permission (formally granted in Jan 2018) a new application for full permission was submitted Q4 2018 for a higher density build proposal. (Link on DD Central for those with access). All the documentation looks high quality, esp the 'Design and Access Statement'. Yes it all looks good. They seemed to have worked decently fast as well to clear the site. Yep, they only bought the site mid 2017. By the autumn they had submitted revised plans against the 2012 planning application which had stalled under the previous owners allowing approval in Jan 2018. It is quite a complex site with a river running through it, and to have progressed to submitting a full planning application in autumn 2018 again represents decent progress.
There may well be further design iterations before planning is approved, but I get the feel that the borrower and their team will steadily work through any design concerns the council may have.
I walked the site myself last September (photos on previous page) and I think it pretty obvious that the redevelopment of the site would enhance Whitworth rather than it remaining a very visible brownfield site. I was dubious when the loan first appeared on FS, but (for now) I remain comfortable with the risk level on both the 1st and 2nd rank tranches. Needless to say, if approved, the higher density scheme will increase GDV quite significantly, and hopefully the residual land value as well.
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