North London Commercial Property Loan

The lights are on, but there's nobody at home, clearly...

Like other posters I was surprised to receive the Email yesterday.

When L.C.P hit issues I went back to this loan to see if anything made me want to reduce my exposure, nothing spotted so left as is.

If I had known the buffer was being drawn on for consecutive months my reaction would have been different.

Whilst I don't necessarily agree that a loan should be suspended when the buffer is called on it is my view that this information must be made available to lenders and on the loan details so that prospective purchasers of loan parts can take an informed view of the risk.

I am new on this platform and am still 'playing' so this is going to be interesting for me but I am still really waiting for Invoice Financing to start.

I too regard the RS 5 year as a sort of benchmark and currently my FC holdings tell me they are ahead of that. I expect that eventually my AC returns will be better than my FC returns.

I would imagine that AC is aware of this situation and take the view that it was better not to bother the lenders with "details". At the end of the day , after a sensible time with a reasonable number of holdings if my experiences are not that good then I (and I am sure many others) will drift away. So I must believe that this situation is being managed the best that it can be unless nobody is making any money ?

I'm sorry gnasher but you're missing the point. I'm getting fed up with the "P2P is a big boys game blah blah blah". Games have rules, and these don't include asymmetric information.

I have been thinking about this loan and the reaction to missed payments by AC.

What do lenders feel is the purpose of the interest buffer, when they read in the CR that one is to be built up? I am curious because I'm not entirely sure what purpose I feel it really serves - to me it doesn't carry much weight in terms of security or credit-worthyness besides demonstrating the borrower is confident that they are able to overpay initially.

In an earlier debate I requested that AC introduce an interest rate buffer statement or monitoring document . Is there any progress on this please?

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.