pikestaff
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Post by pikestaff on Nov 21, 2014 13:46:29 GMT
A number of turbine loans are getting very close to the commissioning deadline for earning their optimum FIT, with no news. In one case (127 Fal***th) the deadline may even be today. The credit report says the deadline is the end of November, but the valuation says 21/11 and there is the following exchange in the Q&A, dated yesterday: Q: Is the commissioning date 21 Nov or end of Nov. There is a clear error in either the valuation report or credit report. Can somebody at AC please bother to respond?
A: We have requested an urgent update from the borrower and have chased twice today. We will update as soon as we have received contact. In the interim we are arranging for sales of loan parts to be suspended so no lender is unfairly disadvantaged.
All these loans have the same introducer, whose representative is a member of this forum. Richard Martin, if you are reading, can you update us please both on this loan and more generally? |
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Post by davidricketts1 on Nov 21, 2014 15:02:08 GMT
I am getting rather worried regarding the lack of any clear communication by AC on these WT deals. It seems that the whole process is getting rather ragged with AC seemingly even less informed than I am on the necessary deadlines. I've phoned Central Union a number of times and get nothing but an answering machine. Edit: another investor I know has just got through to CU and been told that they have sent an email to AC with some sort of update. Hmm. That'll be the email I got 20 minutes after this post....
All questions that I can answer are now answered. Still no response on Falmouth but the others all have some slack between commissioning date and expiry of the higher FIT rate period.
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Post by davidricketts1 on Nov 21, 2014 15:16:05 GMT
Thanks for the update on some of the WT loans. Surely CU or the borrower (M*********) can tell you whether the correct drop dead date for the FIT rate is 21 Nov or end of month for Falmouth? Their continued silence is hardly reassuring and smacks of avoidance. This loan can probably withstand a lower FIT rate (given it's LTV is lower than many and it's interest cover is higher) but nonetheless this is rather key information surely and the current docs leave a clear amount of bid-offer in the relevant date. Agreed and I've asked andrewholgate to get involved and speak to CU on this.
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Post by Ton ⓉⓞⓃ on Nov 21, 2014 15:57:42 GMT
Thanks for the update on some of the WT loans. Surely CU or the borrower (M*********) can tell you whether the correct drop dead date for the FIT rate is 21 Nov or end of month for Falmouth? Their continued silence is hardly reassuring and smacks of avoidance. This loan can probably withstand a lower FIT rate (given it's LTV is lower than many and it's interest cover is higher) but nonetheless this is rather key information surely and the current docs leave a clear amount of bid-offer in the relevant date. Agreed and I've asked andrewholgate to get involved and speak to CU on this. I was wondering if we could have the 'G59's put up when they come through on each of the WT, so we can see how close it was?
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Post by johnny on Nov 24, 2014 20:25:47 GMT
Agreed and I've asked andrewholgate to get involved and speak to CU on this. Thanks. I've noticed that the sponsor of this loan has listed a new Mo******f loan on another site over the weekend. This is for MF7 rather than MF2 so technically they are separate companies (in fact the loan seems to be identical to loan 121 on AC which is for company MF6; it seems two baby WTs are to be built on the same site). I find it rather frustrating the sponsor is willing to answer questions on the new loan on that site but does not seem to want to respond to questions from AC about loan 127 which seems to be past its FIT rate deadline. The loan on the other site has been pulled, a strange decision in my opinion. The sponsor should now have more time to answer the questions above.
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pikestaff
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Post by pikestaff on Nov 24, 2014 23:00:10 GMT
Not pulled exactly. The timing of the TC auction was very odd as it was just before the commissioning date. It's going to be re-listed after commissioning, and I won't be surprised if it's re-listed at a slightly lower rate on the basis that the commissioning risk is out of the way.
But yes, CU should now have time to answer our questions...
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mikes1531
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Post by mikes1531 on Nov 25, 2014 2:02:29 GMT
They're not trying to raise cheaper funds so that they can pay off the AC loan, are they?
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pikestaff
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Post by pikestaff on Nov 25, 2014 7:43:18 GMT
No. It's a different turbine. Was listed at 9.75% which will be a tad high once the turbine is commissioned.
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Post by bracknellboy on Nov 25, 2014 8:43:28 GMT
I thoiught it was listed at 9.5 but I may well be wrong. And yes, listing it at a lower rate may be the reason it was pulled: otherwise the straight condition of funds not being release until commissioning which appeared to have been agreed would have been adequate.
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pikestaff
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Post by pikestaff on Nov 25, 2014 16:40:22 GMT
I thoiught it was listed at 9.5 but I may well be wrong. And yes, listing it at a lower rate may be the reason it was pulled: otherwise the straight condition of funds not being release until commissioning which appeared to have been agreed would have been adequate. There were two WTs listed at about the same time. One for a WT that was commissioned in April, at 9.5%, and the M*****f one at 9.75%.
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jonno
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nil satis nisi optimum
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Post by jonno on Nov 26, 2014 9:50:47 GMT
With regard to the Fa****th loan, AC are stating that "We are still to hear from the introducer. Given these delays we are working on the assumption that the period to commission the WT and achieve the higher rate FIT has passed and will be speaking to the valuer this morning to obtain an urgent revaluation of the project." Are they really telling us that the introducer simply hasn't responded to them after this many days? Is AC really not in control at all? Clearly when a loan goes bad, CU goes to ground pretty sharpish. Time to look over my portfolio in both TC and AC and check how much CU sponsored loans I have! Not at all impressed here by AC, CU or the borrower. Do you see a general DD issue (or lack of) emerging yet?
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Post by johnny on Nov 26, 2014 15:26:14 GMT
Well the news is pretty much what we expected. I just don't understand why it has taken over a week to say.
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Post by batchoy on Nov 26, 2014 15:59:23 GMT
Neither CU nor AC come out of this looking particularly good or competent, but it impossible to pass judgement on the borrower if communication has been via CU up until this point.
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oldgrumpy
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Post by oldgrumpy on Nov 26, 2014 16:19:40 GMT
It does concern me these days that so much of this followup activity which AC should be doing as a matter of course seems to happen after persistent nagging by observant lenders.
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mikes1531
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Post by mikes1531 on Nov 26, 2014 16:28:08 GMT
Well the news is pretty much what we expected. It's worse than I was expecting, but perhaps I hadn't done enough homework. A question was asked on the Swan*** WT loan what would happen if the FIT deadline was missed, and the answer there was that the FIT rate would be 18.04p instead of 18.53p. A drop of less than 3% in the FIT didn't seem too concerning. Here, however, the failure to qualify for the 18.53p FIT means a 28% drop to 13.34p, and that has to make a rather significant dent in the income stream for this project -- and for the project valuation. Even with the return of the un-drawn capital, the new valuation is likely to mean that the revised LTV will be in breach of the LTV covenant of the loan, and the borrower will have to do something significant to remedy that. I will be watching the WT loans from the sidelines for a while as other WT projects approach their FIT deadlines. AC seem to have chosen a particularly inopportune time to have launched their GEIA.
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