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Post by Deleted on Mar 19, 2020 16:25:48 GMT
Chatting with fellow investors we all pretty much agreed that FC must be the most exposed [major] platform, with it's reliance on SME's. With massive liquidity issues already at FC one must wonder what will happen next and whether institutional investors will have the stomach? Conversely I see the other big guns (LW, RS, maybe Z) well placed to survive....albeit with lower returns for investors right through until next year.
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Post by shanghaiscouse on Mar 19, 2020 16:39:23 GMT
I don't understand what you mean, will institutional investors have the stomach. There are no significant institutional investors left in the shares of FC Holdings Ltd, except maybe some vulture funds will start buying. There is still £180m of cash after all. Will institutional investors buy packages of FC loans in securitisations, well maybe not in short term but as the crisis recovers in a month or so then yes, this is the very reason 'special situations' funds exist, and the people buying the securitisations so far have all been these type of funds because as you say the quality of the loan book is so poor. Its a question of price. The retail lenders are basically a pain in the b**t and FC doesn't really want them any more. But I agree that due to the nature of their loans, SMEs that were already in the situation that they could not get money from any sensible lender, and with no asset security to fall back on, then there will be even bigger losses, but joy of joys, they are only borne by individual lenders not FC itself.
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Post by GSV3MIaC on Mar 19, 2020 16:48:35 GMT
Unless, of course, HMG starts handing out free money in all directions to avoid business closures... then even FC borrowers may be able to refinance with the bank of BoJo and co.
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Post by Deleted on Mar 19, 2020 16:59:00 GMT
I don't understand what you mean, will institutional investors have the stomach. There are no significant institutional investors left in the shares of FC Holdings Ltd, except maybe some vulture funds will start buying. There is still £180m of cash after all. Will institutional investors buy packages of FC loans in securitisations, well maybe not in short term but as the crisis recovers in a month or so then yes, this is the very reason 'special situations' funds exist, and the people buying the securitisations so far have all been these type of funds because as you say the quality of the loan book is so poor. Its a question of price. The retail lenders are basically a pain in the b**t and FC doesn't really want them any more. But I agree that due to the nature of their loans, SMEs that were already in the situation that they could not get money from any sensible lender, and with no asset security to fall back on, then there will be even bigger losses, but joy of joys, they are only borne by individual lenders not FC itself. Broadly agree. My point is; will institutional investors have the stomach to buy those securities within the time frame you suggest? And if not will the (Gov owned) British Business Bank step in again? And ultimately there will be no individual FC lenders left anyway.
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Post by Deleted on Mar 19, 2020 17:00:04 GMT
Unless, of course, HMG starts handing out free money in all directions to avoid business closures... then even FC borrowers may be able to refinance with the bank of BoJo and co. In the guise of FC's old pal The British Business Bank.
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coogaruk
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Post by coogaruk on Mar 20, 2020 14:36:39 GMT
...but as the crisis recovers in a month or so... I think you are being a tad optimistic there.
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benaj
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Post by benaj on Mar 20, 2020 14:40:51 GMT
You mean most of their borrowers been to the epidemic regions? or their staffs working in FC office?
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spareapennyor2
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Post by spareapennyor2 on Mar 20, 2020 16:07:29 GMT
think most lenders caught a cold at lest? already
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