david42
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Post by david42 on Dec 22, 2017 15:33:09 GMT
Borrower: Borrower: V**** S***** D***** Limited
Amount: £300,000
Term: 48 months (12 months minimum term)
Rate: 13% - Amortising
Primary Security: Chattel Mortgage over 8 new generators with combined cost of £320,000. Debenture over the Company which has £20,800 income per month from a 5 year lease agreement for the generators.
Secondary Security: Personal Guarantee from the majority shareholder
Instant Returns: Enabled
Loan Live: £2,000 bidding limit from 2pm 23 December 2017 until 2pm 28 December 2017
Related loans: 1000071-Di**** Va**** Term Loan - Ge********
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ablender
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Post by ablender on Dec 22, 2017 15:59:09 GMT
I am not sure if I am missing something but the info says that the primary security has a value of £320,000 for a loan of £300,000. I calculate that this results in a LTV of 93.75%. There is no mention of any other values that I can see apart from the personal guarantee. From past experience I learnt not to give much weight to personal guarantees. I also noted that this loan has an interest rate of 13%, i.e. less than the 14% of the previous loan.
Any comments please?
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agent69
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Post by agent69 on Dec 22, 2017 16:04:11 GMT
I cannot fault your mathamatics
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daveb
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Post by daveb on Dec 22, 2017 16:15:03 GMT
At the same time, they are getting £20k a month from the leases and the interest will only be a fraction over £3k monthly on an arrangement that lasts 5 years. They reckon the payback period on a generator is 18 months so the rest of the 5 years is profit. So I presume the main risk is the health of the companies leasing the generators
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james100
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Post by james100 on Dec 22, 2017 16:54:24 GMT
I am not sure if I am missing something but the info says that the primary security has a value of £320,000 for a loan of £300,000. I calculate that this results in a LTV of 93.75%. There is no mention of any other values that I can see apart from the personal guarantee. From past experience I learnt not to give much weight to personal guarantees. I also noted that this loan has an interest rate of 13%, i.e. less than the 14% of the previous loan. Any comments please? On the PG point C** H** seems to have an established commercial track record and if the stated net worth is correct at 1.5M then that's plenty (but I appreciate your comment re PGs in general). Incidentally, p12 of the BP refers to loan **71 (which I'm in) and states that "this loan is up to date and has not had a missed or delayed payment" but the repayments tab indicates November 17 as late payment (it was actually received just a day late, at least into my account). There's a minor calculation error on p6 balance sheet table; nothing material but any glitches on such an important document asking for money always make me a little nervous. Quite like it still...now to investigate the plane.
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david42
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Post by david42 on Dec 22, 2017 17:11:29 GMT
Incidentally, p12 of the BP refers to loan **71 (which I'm in) and states that "this loan is up to date and has not had a missed or delayed payment" but the repayments tab indicates November 17 as late payment (it was actually received just a day late, at least into my account). Payment delays of a day are often caused by Ablrate administrative delays rather than the borrower but they still get recorded as late payments.
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sapphire
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Post by sapphire on Dec 22, 2017 18:02:05 GMT
I am not sure if I am missing something but the info says that the primary security has a value of £320,000 for a loan of £300,000. I calculate that this results in a LTV of 93.75%. There is no mention of any other values that I can see apart from the personal guarantee. From past experience I learnt not to give much weight to personal guarantees. I also noted that this loan has an interest rate of 13%, i.e. less than the 14% of the previous loan. Any comments please? The security value of £320K is on the basis of the value of new equipment....In the event of a default and forced sale I would expect the realised prices to be significantly lower....If say the default and sale occurs in the early days (when an insignificant amount of the principal has been returned in the amortised repayments) when the equipment is in nearly new condition, and it realises (optimistically) 75% of its new value, this would be mean £240K, so effectively on Day 1, this would mean a 125%+ LTV....and a capital loss of 20%+ to the lenders!!! Hope I am not missing something? There is a PG, but as has been discussed in a separate thread ( p2pindependentforum.com/thread/11113/significance-personal-guarantee-lending-limit ) this is realistically not be something which can be relied upon, for the reasons mentioned therein.
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Post by df on Dec 22, 2017 18:02:55 GMT
Incidentally, p12 of the BP refers to loan **71 (which I'm in) and states that "this loan is up to date and has not had a missed or delayed payment" but the repayments tab indicates November 17 as late payment (it was actually received just a day late, at least into my account). Payment delays of a day are often caused by Ablrate administrative delays rather than the borrower but they still get recorded as late payments. Even if it was caused by borrower's administrative delays, one day late is nothing if to compare with late repayments across p2p industry.
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sapphire
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Post by sapphire on Dec 22, 2017 18:19:58 GMT
I am quite puzzled by the interest rates being offered by Ablrate on its various loans having regard to the underlying risk.
In Sep 17, Loan 1000080 with a 65% LTV (first charge on a property) offered 15% p.a.
And here Loan 1000093 is offering 13% for a 125%+ LTV (effectively on Day 1) i.e. a lower rate for ostensibly a much higher risk!
Also, I think there are a number of other examples of Ablrate loans where a 13% interest has been offered for a loan with a much lower LTV and risk compared to 1000093.
So I think it begs the question, how do Ablrate determine the appropriate interest rate having regard to the underlying risk?
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james100
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Post by james100 on Dec 22, 2017 18:23:48 GMT
[In response to df,x-posted with sapphire]
Absolutely, which is why I mention it was only one day yet still recorded as a late payment on the loan tab (without the visibility of delay duration) for anyone checking statements in the BP who notice this discrepancy on the payment record for 71.
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eeyore
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Post by eeyore on Dec 22, 2017 18:48:35 GMT
At the same time, they are getting £20k a month from the leases and the interest will only be a fraction over £3k monthly on an arrangement that lasts 5 years. They reckon the payback period on a generator is 18 months so the rest of the 5 years is profit. So I presume the main risk is the health of the companies leasing the generators If these two companies which are leasing the generators which cost £320,000 to buy for a price over five years of £1.248million, then you'd be right to question their *mental* health! What we don't know are the terms of the lease such as who pays for the regular maintenance and the call-out cover in the event of failure etc. I'd expect the cost of servicing and regular component replacement of heavily-used equipment in an arduous environment to be a significant element in the total-cost-of-ownership - the initial cost of purchase may only be a fraction. But with no direct experience in the industry, I don't know....
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agent69
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Post by agent69 on Dec 22, 2017 19:48:28 GMT
I am quite puzzled by the interest rates being offered by Ablrate on its various loans having regard to the underlying risk. If you are considering risk you need to look at: - What is the likelihood of the business going bust, and
- What are the assets worth if the business goes bust
You only appear to be looking at item 2.
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blender
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Post by blender on Dec 22, 2017 23:04:54 GMT
I am quite puzzled by the interest rates being offered by Ablrate on its various loans having regard to the underlying risk. In Sep 17, Loan 1000080 with a 65% LTV (first charge on a property) offered 15% p.a. And here Loan 1000093 is offering 13% for a 125%+ LTV (effectively on Day 1) i.e. a lower rate for ostensibly a much higher risk! Also, I think there are a number of other examples of Ablrate loans where a 13% interest has been offered for a loan with a much lower LTV and risk compared to 1000093. So I think it begs the question, how do Ablrate determine the appropriate interest rate having regard to the underlying risk? You need to look at the total charges. This one seems to be 13% compared with the other 14% because Ablrate take 1% pm rather than 0.9% (plus 2% up front). After that 2%, the interest rate the borrower pays is about the same 25%.
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ablender
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Post by ablender on Dec 22, 2017 23:52:36 GMT
ablrateandy, can you please confirm that the generators used as security for 1000093 are different from the ones used as security for 1000071.
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sapphire
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Post by sapphire on Dec 23, 2017 7:07:51 GMT
I am quite puzzled by the interest rates being offered by Ablrate on its various loans having regard to the underlying risk. In Sep 17, Loan 1000080 with a 65% LTV (first charge on a property) offered 15% p.a. And here Loan 1000093 is offering 13% for a 125%+ LTV (effectively on Day 1) i.e. a lower rate for ostensibly a much higher risk! Also, I think there are a number of other examples of Ablrate loans where a 13% interest has been offered for a loan with a much lower LTV and risk compared to 1000093. So I think it begs the question, how do Ablrate determine the appropriate interest rate having regard to the underlying risk? You need to look at the total charges. This one seems to be 13% compared with the other 14% because Ablrate take 1% pm rather than 0.9% (plus 2% up front). After that 2%, the interest rate the borrower pays is about the same 25%. Yes. But I think the total interest+fees+charges paid is of greater significance from a borrowers perspective. One would expect a borrower with a riskier proposition to pay overall a higher rate of interest compared to one with a relatively less riskier one. But from a lenders perspective, I think the rate the lender receives should reflect the underlying risk - so in essence a riskier loan should be rewarded with a higher rate of interest - which doesn't appear to be the case with 1000093.
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