p2pfan
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Post by p2pfan on Apr 24, 2020 23:47:41 GMT
As discussed in the main section of these forums, B******e Bond has gone into administration. There's countless articles about it online, such as this one as they apparently borrowed £45m from minibond lenders. I understand they had loans on AC such as #1116. That one shows as having borrowed a humongous £3,416,686 so far. Worryingly, the AC update today for the loan states that they've discovered another entity had been given a charge on the business/building site AC lenders had lent money to. I've just investigated and that new charge was registered recently, on 1 April 2020. I wonder if it was in accordance with the lending terms to AC; it appears not and that they have made an April Fool's of AC lenders indeed. How disastrous do you imagine this could be for AC lenders and AC? |
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Apr 25, 2020 0:54:17 GMT
For clarification the company in administration had no loans on AC but had raised funds that were invested in the projects and is a subsidiary of the parent company of the AC borrowers.
There appear to be no charges relating to the bond over the AC borrowers (may be UNs or equivalent at LR) see further post for charges that may have some relevance
The new charge is a third party charge in support of another group company not further borrowing by the AC borrower. It also may be an equitable charge rather than a legal charge. AC charges should have priority.
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alender
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Post by alender on Apr 25, 2020 7:15:36 GMT
As discussed in the main section of these forums, B*******e Bond has gone into administration. There's countless articles about it online, such as this one as they apparently borrowed £45m from minibond lenders. I understand they had loans on AC such as #1116. That one shows as having borrowed a humongous £3,416,686 so far. Worryingly, the AC update today for the loan states that they've discovered another entity had been given a charge on the business/building site AC lenders had lent money to. I've just investigated and that new charge was registered recently, on 1 April 2020. I wonder if it was in accordance with the lending terms to AC; it appears not and that they have made an April Fool's of AC lenders indeed. How disastrous do you imagine this could be for AC lenders and AC? Thanks for the detail. I have brought up this loan on another post and it looks like it is linked to Loan #1117 (names start the same, B*******) which was suspended at the same time has a a value of £1,037,543.30 and bring the total value to £4,454,229.68 or just over 1% of the QAA loan book (would expect 30d and 90d to have similar exposure). The LTV on these loans are 63.57% and 69.54% respectively.
Correction It is just over 1% of the total AC loan book but in my QAA it is 0.68%.
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sapphire
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Post by sapphire on Apr 25, 2020 8:40:43 GMT
Per the loan holdings list, 0.42% of my QAA balance is allocated to #1116 and 0.26% to #1117. Is this similar to what others are seeing?
If so, ostensibly, this failure is not expected to have a significant impact to QAA lenders?
(Of course, the eventual impact could be lower or higher depending on the relative size of one's QAA holding, if the 'pooled - equal amount' distribution approach continues.)
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TitoPuente
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Post by TitoPuente on Apr 25, 2020 8:55:29 GMT
As discussed in the main section of these forums, B*******e Bond has gone into administration. There's countless articles about it online, such as this one as they apparently borrowed £45m from minibond lenders. I understand they had loans on AC such as #1116. That one shows as having borrowed a humongous £3,416,686 so far. Worryingly, the AC update today for the loan states that they've discovered another entity had been given a charge on the business/building site AC lenders had lent money to. I've just investigated and that new charge was registered recently, on 1 April 2020. I wonder if it was in accordance with the lending terms to AC; it appears not and that they have made an April Fool's of AC lenders indeed. How disastrous do you imagine this could be for AC lenders and AC? Would you mind changing the title of this thread to reflect the accurate situation that has been explained to you? Thanks!
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iRobot
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Post by iRobot on Apr 25, 2020 9:19:01 GMT
Per the loan holdings list, 0.42% of my QAA balance is allocated to #1116 and 0.26% to #1117. Is this similar to what others are seeing? Yep - the same. 'This failure' doesn't directly relate to the loans, although given the (current) "AC Borrower Goes into Administration Owing Millions" thread title, you'd be forgiven for thinking it did.
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alanh
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Post by alanh on Apr 25, 2020 9:42:48 GMT
The current state of the loan book (£428m) is as follows:
Formal default £56m 13%
Suspended (credit event) £13m 3%
Suspended (other) £19m 4%
Monitoring event £39m 9%
The total value of the MLA is £213m. The total amount of loans up for sale is £83m which is 39% of the total value of the loan book, but given that many of those loans are untradeable the %age of sellable loans is more like 50%.
We are now seeing additional loans go bad so expect these numbers to deteriorate further.
No doubt posters like "happy" will come up with some reason as to why they are so much better off in AC than Ratesetter, but then again I think he has probably named himself after the wrong dwarf.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Apr 25, 2020 11:11:32 GMT
Exploring a bit further in daylight.
There are two debentures over the bond company in favour of A*****s which include the AC borrowers as parties and one of the AC properties as secured asset (oddly the same property for both). In theory, the AC loans were taking out A****s but none of the the charges are marked satisfied at CH (not unusual but will complicate things for the administrators). A*****s themselves are in administration.
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p2pfan
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Post by p2pfan on Apr 25, 2020 13:27:54 GMT
As discussed in the main section of these forums, B*******e Bond has gone into administration. There's countless articles about it online, such as this one as they apparently borrowed £45m from minibond lenders. I understand they had loans on AC such as #1116. That one shows as having borrowed a humongous £3,416,686 so far. Worryingly, the AC update today for the loan states that they've discovered another entity had been given a charge on the business/building site AC lenders had lent money to. I've just investigated and that new charge was registered recently, on 1 April 2020. I wonder if it was in accordance with the lending terms to AC; it appears not and that they have made an April Fool's of AC lenders indeed. How disastrous do you imagine this could be for AC lenders and AC? Would you mind changing the title of this thread to reflect the accurate situation that has been explained to you? Thanks! Done. Based on information provided above, hopefully this more accurately reflects the situation.
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p2pfan
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Post by p2pfan on Apr 25, 2020 14:24:03 GMT
Doing some research just now I can see there are many references online to B*****e Bonds not paying direct investors and suppliers for several months. For instance, this newspaper piece states: "The writing had been on the wall since October when B******** missed a promised interest payment to investors." I wish AC lenders had been informed even once by AC the company these two loans sit within had defaulted on multiple payments going as far back as more than half a year. They were clear inductions the business was in dire straights. I certainly would have kept social distance from it like a virus. |
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Post by angel19 on Apr 25, 2020 15:41:33 GMT
Given the B******** Bond was late with its 31st July 2019 interest payment, one of the surest signs of likely failure, how come AC even got involved lending to companies with the same directors? To my mind this raises questions about AC due diligence and risk management when writing loans.
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Post by Ton ⓉⓞⓃ on Apr 26, 2020 11:15:27 GMT
Given the B******** Bond was late with its 31st July 2019 interest payment, one of the surest signs of likely failure, how come AC even got involved lending to companies with the same directors? To my mind this raises questions about AC due diligence and risk management when writing loans.
I might be very naïve but we are talking about separate companies i.e. spv's. at the beginning of which certain assets were put into those spv's and they are still there. Admittedly if it comes to a fire sale their values won't come to close to the figure we want - that's always the case just about. Anyway I'm hoping that the house building etc can go on (covid/lockdown permitting) as normal. Can someone explain why it might all come crashing down. After all that's why spv's are made in the first place to protect co's from contagion.
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ilmoro
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Post by ilmoro on Apr 26, 2020 12:12:25 GMT
Given the B******** Bond was late with its 31st July 2019 interest payment, one of the surest signs of likely failure, how come AC even got involved lending to companies with the same directors? To my mind this raises questions about AC due diligence and risk management when writing loans.
I might be very naïve but we are talking about separate companies i.e. spv's. at the beginning of which certain assets were put into those spv's and they are still there. Admittedly if it comes to a fire sale their values won't come to close to the figure we want - that's always the case just about. Anyway I'm hoping that the house building etc can go on (covid/lockdown permitting) as normal. Can someone explain why it might all come crashing down. After all that's why spv's are made in the first place to protect co's from contagion.
It will depend on whether there are any obligations on the SPV attached to the bond funds which would allow the bond investors to pursue the SPV for the debt via a WUP etc that would force the SPV into administration to protect itself (eg like that other development loan) I suspect more of an issue as far as AC is concerned are the third party charges.
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Post by angel19 on Apr 26, 2020 12:13:57 GMT
I guess my point was that if you have three companies with the same directors, then if one of those companies has managed to burn £45million of investors cash with nothing to show for it, you may have doubts about the wisdom of lending to the other two companies.
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puddleduck
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Post by puddleduck on Apr 26, 2020 13:24:47 GMT
I guess my point was that if you have three companies with the same directors, then if one of those companies has managed to burn £45million of investors cash with nothing to show for it, you may have doubts about the wisdom of lending to the other two companies. What you have described is what is known as good old fashioned common sense, sadly lacking in many parts of the P2P industry.
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