mikes1531
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Post by mikes1531 on Dec 6, 2013 21:36:14 GMT
Since we have a new lending opportunity, I've started a new thread.
I've taken a look at the Credit Report front page, and that prompted a few questions that I've submitted. Since it's Friday and the loan opens for bidding on Monday, there isn't a lot of time to supply answers, but perhaps some will be answered when the full Credit Report becomes available. What I asked was...
1) The auction listing says the loan will be for £210k, yet the credit
report front page refers to a loan of £200k. Why the discrepancy?
2) The accounting year ended more than eight months ago, yet the March '13 accounts have not been certified. Why are they so delayed? Might they be available in final form before this loan opportunity closes to bids?
3) The expectation for the current year (two-thirds gone already) is for similar Turnover to last year but Gross Profit/Margin will be barely more than half of last year's, and Net Assets will be down 20%. Why are this year and next year expected to be so different from past years?
4) The stated payments are more than enough to pay off a £210k loan over 10 years. I presume this means that while the rate to Assetz lenders is 11.5%, the rate being charged to the borrower is higher, with the difference being a loan monitoring fee payable to Assetz. Is this correct? If so, will the details of the fee and/or the rate to the borrower be disclosed in the final credit report?
Is Question 2 a reasonable one to ask? Or is it common for it to take more than eight months to finalise/certify accounts?
The story behind Question 4... I've noticed that in some Credit Reports for previous loans there was specific mention of a Loan Monitoring fee. There wasn't in others, and in one case the only reason I realised there was a fee was when I noticed that the annual payments on a 11.25% interest-only loan actually were 1%/month (12% p.a.). I feel that in the interest of full disclosure and transparency, Assetz ought to make clear the existence of the Loan Monitoring fee and indicate its rate -- it's a variable amount -- on every loan they organise. Do others agree?
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bugs4me
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Post by bugs4me on Dec 6, 2013 22:14:52 GMT
Since we have a new lending opportunity, I've started a new thread. I've taken a look at the Credit Report front page, and that prompted a few questions that I've submitted. Since it's Friday and the loan opens for bidding on Monday, there isn't a lot of time to supply answers, but perhaps some will be answered when the full Credit Report becomes available. What I asked was... 1) The auction listing says the loan will be for £210k, yet the credit report front page refers to a loan of £200k. Why the discrepancy? 2) The accounting year ended more than eight months ago, yet the March '13 accounts have not been certified. Why are they so delayed? Might they be available in final form before this loan opportunity closes to bids? 3) The expectation for the current year (two-thirds gone already) is for similar Turnover to last year but Gross Profit/Margin will be barely more than half of last year's, and Net Assets will be down 20%. Why are this year and next year expected to be so different from past years? 4) The stated payments are more than enough to pay off a £210k loan over 10 years. I presume this means that while the rate to Assetz lenders is 11.5%, the rate being charged to the borrower is higher, with the difference being a loan monitoring fee payable to Assetz. Is this correct? If so, will the details of the fee and/or the rate to the borrower be disclosed in the final credit report? Is Question 2 a reasonable one to ask? Or is it common for it to take more than eight months to finalise/certify accounts? The story behind Question 4... I've noticed that in some Credit Reports for previous loans there was specific mention of a Loan Monitoring fee. There wasn't in others, and in one case the only reason I realised there was a fee was when I noticed that the annual payments on a 11.25% interest-only loan actually were 1%/month (12% p.a.). I feel that in the interest of full disclosure and transparency, Assetz ought to make clear the existence of the Loan Monitoring fee and indicate its rate -- it's a variable amount -- on every loan they organise. Do others agree? Q2 is more than fair. I would have thought that it would have been in their interests for these accounts to be finalised even though they are not obliged to file them yet. I doubt if they will be available before the bidding starts. Looking at the front page I'll wait until the full report is available but at this stage it will not be for me.
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Post by pepperpot on Dec 6, 2013 23:04:39 GMT
This company's duedil page wouldn't look out of place on a 'C' rated loan on FC (min 9.6%) and the fact we have 1st legals over equipment and debtors (even on the lower estimates of each has a surplus of 50k) 11.5% looks quite good to me, I'm more interested in this than the Redditch one which looks very awkward to get residential use for. But I'm more than happy for people to point out a glaringly obvious hazard that I'm blind too... I've a tendency to get blinkered on anything over 11 and have to consciously stop my eyebrows from rising  |
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mikes1531
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Post by mikes1531 on Dec 7, 2013 2:25:54 GMT
But I'm more than happy for people to point out a glaringly obvious hazard that I'm blind too... How about that the value of used equipment -- and probably very specialised equipment at that -- can seem to be quite substantial until it is being sold at auction to settle an unpaid debt? It could be sort of like the difference between what you'd use as a replacement value of a piece of jewelry or artwork for insurance purposes and what you'd get if you took it in to a dealer and asked what they'd give you for it on the spot.
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Post by batchoy on Dec 7, 2013 3:12:33 GMT
2) The accounting year ended more than eight months ago, yet the March '13 accounts have not been certified. Why are they so delayed? Might they be available in final form before this loan opportunity closes to bids? The simple answer to that one is probably because they aren't due yet, looking at their rating data the accounts are not due to be lodged until 31st December 2013, the last set were lodged on 10 December 2012, and its fairly typical not to sign-off on the accounts until the last possible moment. My previous employer had the same accounting and filing dates and the last piece of mail to go out (I used to drop off the post at the sorting office) on Christmas Eve was the accounts which would have been signed off that morning. However given that this company's accounts are due in the next few days it would not be unfair to expect them to be available with the final report. In terms of doing business with them as a supplier the service I use rates them as a good risk, though given the draft figures that may well change once the accounts get filed. Doing a little Googling the the resale value of secondhand lens making equipment doesn't look brilliant so taking them as security is a bit of a concern but we need to see how they have been valued: book or market.
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Post by bracknellboy on Dec 7, 2013 8:16:38 GMT
well from my quick scan: I'd rate the security on this as poor. Second hand lens making equipment etc. ? Regardless of what the report says, I'd be wary of expectation of recoverable value. Debenture covering debtor book? If the business is/does go into decline, its of limited value. Of course it is all still better than nowt. Compensated by the rate of course.
I have to say I'm not terribly keen on the habit Assetz has of putting up long'ish term loans (5 years) which are 'close to but not quite' interest only loans. Its a strange hybrid they use, and kicks the risk profile up a fair bit when the term is that long. But maybe that's what's differntiating them.
I'd also like to see a more detail on what was so 'inappropriate' about the original loan that was being taken out, and what it was taken out for, and what the exit charges are on that loan. At the end of this refinance, the company will still have a substantil debt: so what was the money original used for and what was the useful life of the investment made from that money relative to the balance of loan that will be outstanding in 5 yeas time.
Notice its Ludgate as sponsor: kind of interesting, raises other questions in my head (not bad ones I hasten to add, just questions...)
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bugs4me
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Post by bugs4me on Dec 7, 2013 9:51:51 GMT
In view of the risk although we've only got page one to view, I've asked for further details regarding the personal guarantees. I've been down that road before with another well known lender to find the PG wasn't worth the paper it was written on. Unfortunately the AC site doesn't appear to be showing anything under the Q&A section.
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Post by pepperpot on Dec 7, 2013 10:23:03 GMT
If the info we're given is correct the only 'business going into decline' problem I can see is from competition, as it's an aging population background demand should in theory increase. And I agree, personal guarantees should mean that all loans are 100% safe! ha! Hopefully the full report will be up today but going on recent Assetz form it'll be lunchtime on Mon.
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Post by batchoy on Dec 7, 2013 10:53:36 GMT
If the info we're given is correct the only 'business going into decline' problem I can see is from competition, as it's an aging population background demand should in theory increase. The problem is that this company appears only to deal with independent opticians, and people are drawn to places that advertise which been the big chains i.e. Specsavers or if they are like my mother was they go to the independent to get the personal service in getting their eyes tested but then take their prescription to Specsavers to get the 2 for 1 or other offers.
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bugs4me
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Post by bugs4me on Dec 7, 2013 11:31:31 GMT
If the info we're given is correct the only 'business going into decline' problem I can see is from competition, as it's an aging population background demand should in theory increase. The problem is that this company appears only to deal with independent opticians, and people are drawn to places that advertise which been the big chains i.e. Specsavers or if they are like my mother was they go to the independent to get the personal service in getting their eyes tested but then take their prescription to Specsavers to get the 2 for 1 or other offers. Future P&L projections do not look good. Gross margin drops off a cliff for y/e 2014 & 15. We need to know more about the substance behind those PG's. Is it normal for AC not to permit any Q&A's??
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Post by chris on Dec 7, 2013 13:02:46 GMT
There are six Q&A questions pending approval for display (ie. confirming they're not spam) and therefore also awaiting an answer. If the RM hasn't answered on Monday then I'll chase them up.
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bugs4me
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Post by bugs4me on Dec 7, 2013 13:09:24 GMT
If the RM hasn't answered on Monday then I'll chase them up. That will be cutting it a bit fine IMO
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Post by chris on Dec 7, 2013 13:13:17 GMT
That will be cutting it a bit fine IMO Duly noted and chase email sent to them now.
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Post by jevans4949 on Dec 7, 2013 13:18:31 GMT
Given the size of the loan, and the scepticism expressed above, it is unlikely that it will fill immediately - unless Assetz have some HNWIs lined up. People can probably afford to hang fire for the answers they need until the information is available. Those who don't care or can't wait will jump in anyway.
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mikes1531
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Post by mikes1531 on Dec 7, 2013 16:02:49 GMT
Is it normal for AC not to permit any Q&A's?? There are six Q&A questions pending approval for display (ie. confirming they're not spam) and therefore also awaiting an answer. If the RM hasn't answered on Monday then I'll chase them up. It shouldn't take more than a few seconds to look at a question that's been asked and determine whether it's spam or legitimate. Many times in the past, questions have been posted before answers were available, and IMHO that should be standard practice. It allows other potential lenders to see what questions have been asked and give them something to think about, and possibly prompt related questions. (It also would stop multiple lenders asking the same questions.) People shouldn't be required to use this forum to obtain such important information. If Assetz doesn't wish to work at the weekend, and borrowers don't wish to be answering questions at the weekend, that's fine -- but in that case upcoming lending opportunities shouldn't be released to the website of Friday and bidding opened on Monday. That doesn't leave a reasonable time for Q&A, and could be seen as putting unnecessary pressure on lenders to bid before all the appropriate info is available, and that won't do Assetz's reputation any good at all.
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