nw99
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Post by nw99 on Sept 6, 2019 20:44:41 GMT
Yes worth a a good position
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Post by Badly Drawn Stickman on Sept 6, 2019 21:39:23 GMT
Yes, as this is going to struggle to receive the whopping amount of money the borrowers want, the interest has been increased to 15%. One doesn't have to be a genius to recognise this is a high risk loan, but the higher interest might tempt more people to invest? Thoughts? I have not done much DD on this loan, I eliminated it from my plans solely on the connections to several others. I did make a modest investment on the rather cynical decision that it would not fill and the instant returns would be nice. The rate change will make no difference to my position but may increase the 'risk' this tranche eventually fills. The scenario would probably be that if it did any future tranches would need even greater incentives to fill, I really don't see the full requirement being raised and have no idea where that would leave this tranche.
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macq
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Post by macq on Sept 6, 2019 22:35:32 GMT
Yes, as this is going to struggle to receive the whopping amount of money the borrowers want, the interest has been increased to 15%. One doesn't have to be a genius to recognise this is a high risk loan, but the higher interest might tempt more people to invest? Thoughts? Not sure that with P2P post L***y this will make much difference as surely if people have decided there is more risk then normal or they don't like the connections to other loans past/present or other reasons that 2% will help. You could even say that the extra 2% looks a bit desperate as while its true that you need a risk reward ratio when evaluating an offer whats changed here? Yes its true the reward has increased but surely at the same time the risk has increased as the company needs to find more money - so should peoples opinion not stay the same One way or the other?
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blender
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Post by blender on Sept 6, 2019 23:34:44 GMT
Yes, as this is going to struggle to receive the whopping amount of money the borrowers want, the interest has been increased to 15%. One doesn't have to be a genius to recognise this is a high risk loan, but the higher interest might tempt more people to invest? Thoughts? I have not done much DD on this loan, I eliminated it from my plans solely on the connections to several others. I did make a modest investment on the rather cynical decision that it would not fill and the instant returns would be nice. The rate change will make no difference to my position but may increase the 'risk' this tranche eventually fills. The scenario would probably be that if it did any future tranches would need even greater incentives to fill, I really don't see the full requirement being raised and have no idea where that would leave this tranche. Oh dear! The £500k is the maximum for the tranche. There is no minimum. P.18 says so and that your cash will be drawn down at the end of the listing period. There have been a few of these 'up to' loans recently, which worries me. Looks rather 'hand to mouth'. Not for me.
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Post by df on Sept 7, 2019 3:44:20 GMT
Yes, as this is going to struggle to receive the whopping amount of money the borrowers want, the interest has been increased to 15%. One doesn't have to be a genius to recognise this is a high risk loan, but the higher interest might tempt more people to invest? Thoughts? Yes, increasing interest rate can attract more funds. 15% is about right for this level of risk. How many and how much remains to be seen. I wish this loan every success, but I can't see it moving close to target amount in near future. I've already invested as much as I can afford to risk in this loan, so no increase from me regardless of rate.
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macq
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Post by macq on Sept 7, 2019 7:27:38 GMT
It may add new money and while its true the rise to 15% may reflect the risk better and perhaps should have been the rate from the start,but as purely a decision based on the new rise i'm not sure anything has changed. I.e if someone at work bets me £20 pound to juggle 4 knives and i say no chance its to risky offering me another £5 does not make it any better but if they change it for 2 knives it could be worth a shot.But not sure in this case the business can sweeten the pot down in risk in that way and for me personally there is a point where if you offer me too much i start to wonder why and worry more
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Post by Badly Drawn Stickman on Sept 7, 2019 9:11:13 GMT
I have not done much DD on this loan, I eliminated it from my plans solely on the connections to several others. I did make a modest investment on the rather cynical decision that it would not fill and the instant returns would be nice. The rate change will make no difference to my position but may increase the 'risk' this tranche eventually fills. The scenario would probably be that if it did any future tranches would need even greater incentives to fill, I really don't see the full requirement being raised and have no idea where that would leave this tranche. Oh dear! The £500k is the maximum for the tranche. There is no minimum. P.18 says so and that your cash will be drawn down at the end of the listing period. There have been a few of these 'up to' loans recently, which worries me. Looks rather 'hand to mouth'. Not for me.
The sins of not much DD I guess. I'm sure at one point this was displayed in the 'bidding box'. On the plus side for me, I always assume there is the possibility the loan fills and only invest accordingly. The logic of drawing down a possibly relatively small amount of the overall loan required is something the platform and borrower would need to discuss I suspect. The way the loan filled suggests a fair percentage of the current amount was reflex bidding initially, followed slowly by opportunistic, what is really needed is committed.
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blender
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Post by blender on Sept 7, 2019 9:29:16 GMT
Yes, the minimum has become less had to find. In predicting the likely decisions on many new and existing Ablrate loans, I am guided by the old maxim 'cash is king'. On this and particularly 129, and not being in any of the six old loans, I rather wonder at what point the risk/reward balance suggests that equity funding might be the first call.
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criston
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Post by criston on Sept 7, 2019 14:24:47 GMT
Had a quick read to try & assess security.
It say's first charge on £3.15m assets.
Obviously the first £500k is well covered, but the loan increases to £2.5m over 12 months.
So assuming the remainder is drawn at say £500k every 2 months & as the loan is amortising, an average of 6 months repayments are made in the first 12 months.
The loan is over 48 months so 12,5% of the loan is paid back over the first 12 months.
After 12 months £2,18m is still owed which gives a LTV of 69% & reduces during the term.
Feel free to put me right if I have got anything wrong.
Not sure if 48 months repayments apply from the start of the first tranche or last one.
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blender
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Post by blender on Sept 7, 2019 21:42:50 GMT
Had a quick read to try & assess security. It say's first charge on £3.15m assets.
Obviously the first £500k is well covered, but the loan increases to £2.5m over 12 months. So assuming the remainder is drawn at say £500k every 2 months & as the loan is amortising, an average of 6 months repayments are made in the first 12 months. The loan is over 48 months so 12,5% of the loan is paid back over the first 12 months. After 12 months £2,18m is still owed which gives a LTV of 69% & reduces during the term. Feel free to put me right if I have got anything wrong. Not sure if 48 months repayments apply from the start of the first tranche or last one. Hi Criston. I think this proposal needs more than a quick read. The £3.15m is a forecast of assets at end 2019, which assumes that the plan is successfully achieved and I think includes the value of the subsidiary businesses as successful going concerns. The plan assumes more funding than just £500k. I could not find any new first charges on property. There is a first charge debenture over the borrower. The subsidiaries, which own the venues, are offering debentures and corporate guarantees, not charges over property. No valuations or LTVs are given in the proposal, which is wise imo. The 48 months repayments relate to each tranche separately, from draw down.
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criston
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Post by criston on Sept 8, 2019 6:54:51 GMT
Had a quick read to try & assess security. It say's first charge on £3.15m assets.
Obviously the first £500k is well covered, but the loan increases to £2.5m over 12 months. So assuming the remainder is drawn at say £500k every 2 months & as the loan is amortising, an average of 6 months repayments are made in the first 12 months. The loan is over 48 months so 12,5% of the loan is paid back over the first 12 months. After 12 months £2,18m is still owed which gives a LTV of 69% & reduces during the term. Feel free to put me right if I have got anything wrong. Not sure if 48 months repayments apply from the start of the first tranche or last one. Hi Criston. I think this proposal needs more than a quick read. The £3.15m is a forecast of assets at end 2019, which assumes that the plan is successfully achieved and I think includes the value of the subsidiary businesses as successful going concerns. The plan assumes more funding than just £500k. I could not find any new first charges on property. There is a first charge debenture over the borrower. The subsidiaries, which own the venues, are offering debentures and corporate guarantees, not charges over property. No valuations or LTVs are given in the proposal, which is wise imo. The 48 months repayments relate to each tranche separately, from draw down.
Hello blender. This is what I was going on. 'The principal security is a first ranking debenture over the Company, its
current and any future assets. The Company’s fixed assets at the end
of 2019 is forecast to be £3.15m. This security suite encompasses the
main value in the business when linked with the debentures and
corporate guarantees offered by the subsidiaries which operate the
different venues and the management company'
I assumed assets included property, but as you say I have not studied the complete document in detail as I tend to 'zoom in' on security.
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blender
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Post by blender on Sept 8, 2019 7:44:20 GMT
Hi Criston. Assuming is not a good idea. There are warnings of risks elsewhere in the documents. Some of the property may be leasehold and there may be other charges on property within the subsidiaries, we are not told. In any case, the value of a pub is primarily dependent on its trade, and not on the bricks and mortar. So that the £3.15m will be very much dependent on the assessment of the value of the subsidiaries as going concerns as predicted by the borrower and dependent upon running successfully to the borrower's stated plan, including necessary funding. Take a look at 67 & 68 where valuations and LTVs were based on the pub as a going concern, but the residual security of the business in liquidation was simply the value of the freehold bricks and mortar, part demolished. Ablrate is not giving a valuation or LTV here. All these projections come from the borrower, not from Ablrate, and I would suggest that this loan opportunity is in part presented because of the support by the borrower of the existing four Ablrate loans. That does not mean that it is necessarily not a good opportunity, just that you have to be very thorough with your DD before taking a punt.
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criston
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Post by criston on Sept 8, 2019 7:57:13 GMT
OK. Ablrate, can we have a breakdown of the £3.15m assets.
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macq
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Post by macq on Sept 10, 2019 14:34:36 GMT
That 15% seems to have 'inspired' quite a few more people to support this project. I wonder if 129 will go to 15%, or maybe 16%? After all, these two loans are two sides of the same coin and 129 seems to be the loan which develops the entity which could not be accommodated in 131, though initially it was to be. If I were choosing, and had not put my spare cash in the care-home top-up, then I would want to support 129 as more Ablratey. That 2% would be a problem. Shorter amortisation on 129, though nothing to match the £3.15m of assets of security in 131 in less than four months' time! But I have this comfy chair in the care home, and the excitement of watching these birds through the window. Or it could be that its not 'inspired' quite a few more people to support it but inspired the same people to put extra in.But can be discussed over the chocolate digestives at afternoon tea in the care home Must admit i thought it was at about 17% filled late last week and now 19% so maybe not the jump they were hoping for
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Post by df on Sept 10, 2019 15:13:10 GMT
That 15% seems to have 'inspired' quite a few more people to support this project. I wonder if 129 will go to 15%, or maybe 16%? After all, these two loans are two sides of the same coin and 129 seems to be the loan which develops the entity which could not be accommodated in 131, though initially it was to be. If I were choosing, and had not put my spare cash in the care-home top-up, then I would want to support 129 as more Ablratey. That 2% would be a problem. Shorter amortisation on 129, though nothing to match the £3.15m of assets of security in 131 in less than four months' time! But I have this comfy chair in the care home, and the excitement of watching these birds through the window. Or it could be that its not 'inspired' quite a few more people to support it but inspired the same people to put extra in.But can be discussed over the chocolate digestives at afternoon tea in the care home Must admit i thought it was at about 17% filled late last week and now 19% so maybe not the jump they were hoping for It's a challenge to fill large loans in current p2p climate. Generally speaking, lenders' attitude is different from how it was 2-3 years ago. People burned their fingers on Col, Ly, FS, AC, BM etc. so became more careful in what they invest and how much. I guess some people will be investing their returns into 131, but can't see this loan filling without substantial contribution from underwriters. And that's only tranche 1...
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