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Post by alexp2p on Jun 21, 2019 0:41:35 GMT
Any opinion about this loan?
Especially if the tenant moves out out: would be the security enough and long term perspectives?
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eeyore
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Post by eeyore on Jun 21, 2019 8:04:55 GMT
I'm more curious about the borrower's strategy. The borrower has only recently purchased the property (using funds from its own shareholders) at a price which had the likelyhood of the current tenant NOT renewing in November already factored-in, but the exit strategy for this loan stated in the loan proposal is to re-sell the property in a year or so, presumably having renewed the current tenancy or found a new tenant. The current tenant has another store in a retail park only a short distance away and has been closing stores as the leases expire (the tenant recently merged with another national chain and has many stores in close proximity to each other). It all depends upon your confidence in the market valuation and the demand for retail space....
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sapphire
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Post by sapphire on Jun 21, 2019 8:43:08 GMT
Would it be right to infer from the 'Full Loan Request' that the borrowers (especially having regard to their background) are hoping for a (significant?) increase in value if a change of use is attained, especially as the property is in a area earmarked for regeneration by the Council and then sell this to a developer?
(The borrower has purchased this recently at a price greater than the valuation per the subsequent VR which does not include any 'hope' value.)
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liso
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Post by liso on Jun 21, 2019 8:54:35 GMT
I have no confidence in the exit proposals for this.
The suggestion that the current tenant might renew the lease is unconvincing, and who is going to buy it? Large retail spaces like this are standing empty in many, many towns and cities awaiting a new tenant or possible redevelopment.
The local area is currently undergoing regeneration and perhaps the borrower (and PL) believe this will make the property more attractive to potential tenants/purchasers, but if so, it's not a view I share.
This one's not for me.
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sapphire
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Post by sapphire on Jun 21, 2019 11:37:25 GMT
My gut feeling is that the interest rates offered for Tranches B & C of this loan does not appear to be sufficiently high to align with the (significantly) higher risks in these tranches when compared to the the risk and rate of return offered in Tranche A. I would welcome thoughts from others.
Also, any idea if there a formula (or any technique or heuristic) which could be used to provide an objective indication of the appropriate/fair rate of interest for each of the different tranches having regard to the level of risk entailed in each?
Any idea how Proplend determines this objectively?
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rs
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Post by rs on Jun 21, 2019 12:21:07 GMT
My gut feeling is that the interest rates offered for Tranches B & C of this loan does not appear to be sufficiently high to align with the (significantly) higher risks in these tranches when compared to the the risk and rate of return offered in Tranche A. I would welcome thoughts from others. Also, any idea if there a formula (or any technique or heuristic) which could be used to provide an objective indication of the appropriate/fair rate of interest for each of the different tranches having regard to the level of risk entailed in each? Any idea how Proplend determines this objectively? Maybe the guarantee offered makes the tranche B & C interest rates lower than everyone expected.
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eeyore
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Post by eeyore on Dec 23, 2020 9:14:53 GMT
The loan was repaid in full yesterday (22-Dec-2020) five days before the due date.
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