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Post by alexp2p on Jul 31, 2020 9:07:40 GMT
Any opinions on the new loan W***** M**** U*** which will go live next week?
Borrower is at the same time also one tenant, but will purchase the building.
In my understanding, after purchase transaction interest will be covered only by the residential tentant
and so the interest cover ratio will go do down. Security is then also covvered by the personal guarantee the debenture
.
Unclear if the commercial retail tenant makes any '' rent payments'' or something else?
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bababill
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Post by bababill on Aug 4, 2020 23:10:07 GMT
It appears the residential tenant pays £15,600 and so does the downstairs chemist. Though the values are the same upstairs does look to be a different tenant. Interest expense is over 16k a year..
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bababill
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Post by bababill on Aug 6, 2020 21:19:59 GMT
which will go live next week? What makes you say this?
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eeyore
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Post by eeyore on Aug 20, 2020 11:17:40 GMT
This loan, PLL0934, finally goes on offer tomorrow, Friday 21st. Note: the Loan Proposal has been updated since the original was posted in July.
Comment: Loan & exit strategies look a bit woolly to me, as if the borrower isn't convinced about the plan or perhaps the viability of the business. But that's just my subjective reaction.
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liso
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Post by liso on Aug 20, 2020 13:46:54 GMT
A poorly written LRS - gaps, inconsistencies, and a cut and paste that would shame a child. Obscures more than it clarifies.
I have no idea what to make of this. I will not be investing.
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Post by alexp2p on Aug 21, 2020 7:10:38 GMT
1) what has been updated since the original was posted in July?
2) what are the gaps and inconsistencies in your opinions?
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eeyore
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Post by eeyore on Aug 21, 2020 9:01:46 GMT
1) what has been updated since the original was posted in July?2) what are the gaps and inconsistencies in your opinions? 1: The loan has been increased so that the LTV has risen from 50% to 55%. There's now a £24.5k TrancheB loan on offer. The overall interest rate charged to the borrower has been increased from 6.5% to 6.62%. The interest rate for TrancheA lenders remains at 6.5% (with the new TrancheB offering 7.82%).
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liso
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Post by liso on Aug 21, 2020 10:00:50 GMT
1) what has been updated since the original was posted in July? 2) what are the gaps and inconsistencies in your opinions?Much of the above is in the detail which for obvious reasons I cannot go into here. But to give a few more general examples.... a) It is never clear to me who or what the LRS is referring to by 'the borrower', whether it is the SPV, an underlying business, or an individual. 'The borrower' seems to be used interchangeably for all. Similarly with 'the tenant'. The LRS refers throughout to 'the tenant' but without differentiation, yet there appears to be more than one lease in place with different entities. b) Losses are referenced but never explained or expanded on. c) A directorship is explained as being necessary because there is only one professional working in the underlying business, and at the same time we are told there are 2 professionals in the business. I hope the DD has been done with more care than this!
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eeyore
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Post by eeyore on Aug 21, 2020 11:20:49 GMT
Both tranches filled before 12:20!
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liso
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Post by liso on Aug 21, 2020 19:49:56 GMT
Both tranches filled before 12:20! ..... shakes head in amazement....
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bababill
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Post by bababill on Aug 22, 2020 5:20:37 GMT
i thought it was a good loan.. wish was able to secure more then 2k allocation.
the residential tenant alone nearly covers the interest payments.
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elliotn
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Post by elliotn on Aug 22, 2020 6:12:33 GMT
i thought it was a good loan.. wish was able to secure more then 2k allocation. the residential tenant alone nearly covers the interest payments. Agreed. The retailer would have been paying market rent since at least 2017 to the freeholder and this will now be transferred to the spv (with PL covenants). And you’ve got a 2 bed flat above paying nearly all of our loan so this looks like strong ICR even allowing for any apartment voids. Perhaps most importantly A is half the known purchase price which should make rental cover pretty academic in even a messy recovery. And this is the livelihood of the new borrower’s directors so they’re heavily incentivised to manage their drawings and not let the 6m reserve lapse let alone their business - no matter how long we’re expected to continue washing our hands to God Save P2P - and provide the trading record for refi in 3 yrs (I’d be happy to extend at this ltv with a consistent payment record). ...I took on overdraft fees for my slice!
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Post by uksoul on Aug 22, 2020 10:10:47 GMT
'.I took on overdraft fees for my slice!'......Im not the only one then who does this on occassion..
I did not invest in this loan as im saving for a couple of the others in the pipeline but agree with you on it being a sound investment.
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Post by overthehill on Aug 22, 2020 20:09:39 GMT
Worst case scenario, the bricks and mortar value of the whole building with the retail changed to residential makes it a sound enough investment at that LTV
I also found the documentation less than clear for third party consumption. Pharmacies may be a better long term prospect than other types of retail, I don't know, but I'm not keen on any retail unless it has scope for residential conversion or it is in a prime location and has a large footfall.
I have complete faith in Proplend's due diligence but I skipped this one as the rate is too low given the unerring downward trend in high street retail, council rates are killing town centre businesses while online retailers have much less overheads.
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