dave4
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Cynical is a hobby not a lifestyle
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Post by dave4 on Sept 28, 2021 11:29:54 GMT
Borrower Sector: Various.
Loan Tranche I Amount: £250,000.
Term: 36 months (6 months minimum term).
Rate: 8% - Interest Only.
ect...
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Balder
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Post by Balder on Sept 28, 2021 11:34:22 GMT
I hope this hasn't got a link to 120 and 124.
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ptr120
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Post by ptr120 on Sept 28, 2021 11:35:42 GMT
I hope the proposal has more information about what a put options is, and the terms of the option.
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macq
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Post by macq on Sept 28, 2021 12:01:14 GMT
i can invest in investment trusts/funds using high yield/junk bonds or fallen angels etc paying 6% or strategic bond funds paying 4% or passive paying lower but all will also have the chance of growth (or to be fair loss) run by established investment companies with protection on the overall fund. This seems to offer me chance to lend to somebody who already holds the bonds and then pay me 8% for the risk of failure of the bond or the borrower or even maybe both? Hopefully its not that - but either way should make interesting reading of the offer
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blender
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Post by blender on Sept 28, 2021 12:36:56 GMT
I never dreamed that 'asset backed lending' would be a portal to a world of such infinite wonder and variety.
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jonno
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nil satis nisi optimum
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Post by jonno on Sept 28, 2021 13:06:01 GMT
I never dreamed that 'asset backed lending' would be a portal to a world of such infinite wonder and variety. Is "infinite wonder and variety" blenderish for "Dodgy Stuff"?
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macq
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Post by macq on Sept 28, 2021 13:18:34 GMT
I can understand why Banks & financial institutions will take a bond as collateral against a loan ( i believe ).But as has been seen by bonds from the likes of Debenhams,New Look etc individual bonds carry a big risk and if i understand the email thats also with a borrower between me and the bond
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macq
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Post by macq on Sept 28, 2021 13:24:03 GMT
I never dreamed that 'asset backed lending' would be a portal to a world of such infinite wonder and variety. Twilight Zone intro also starts with a portal into a world of infinite wonder & variety
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blender
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Post by blender on Sept 28, 2021 13:25:25 GMT
I never dreamed that 'asset backed lending' would be a portal to a world of such infinite wonder and variety. Is "infinite wonder and variety" blenderish for "Dodgy Stuff"? That would not be fair; its more the case that it's a world which contains opportunities that chameleons don't understand and therefore would not choose. We are more limited to physical assets, like homes or tools or maybe even food if it can be identified and secured. This is rather more intangible. More details are coming and if others can fully understand the proposition and can evaluate the balance of risk and reward then fine. I am keen for Ablrate to develop new income streams. So that they can work on restoring mine.
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eeyore
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Post by eeyore on Sept 28, 2021 13:26:57 GMT
This loan is the offering trailed in August and discussed in the thread "8% bond 50% LTV" p2pindependentforum.com/thread/18805/8-bond-50-ltv-abl?page=1The security offered appears to me to be a nominal £500,000 debenture on a £60million-turnover company which is making acquisitions and is buying the acquisitions using debentures (presumably payable in three years). One or more of the ex-owners of the acquired companies is prepared to pay £60k plus ABL-fees over three years for the nominal £500k in exchange for a £250k loan from ABL lenders. So, if the acquisition company debenture pays out, the "ex-owner" will get a net £500k less the £60k + ABL fees; if the debenture doesn't pay out, then he walks away with our £250k less £60k+ABLfees. Whether to invest in this loan depends on the value of the debenture in terms of our confidence that it'll pay out, but it sounds to me that the "ex-owner" doesn't have much confidence in the prospect of the pay-out.
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Post by Badly Drawn Stickman on Sept 28, 2021 14:14:17 GMT
This loan is the offering trailed in August and discussed in the thread "8% bond 50% LTV" p2pindependentforum.com/thread/18805/8-bond-50-ltv-abl?page=1The security offered appears to me to be a nominal £500,000 debenture on a £60million-turnover company which is making acquisitions and is buying the acquisitions using debentures (presumably payable in three years). One or more of the ex-owners of the acquired companies is prepared to pay £60k plus ABL-fees over three years for the nominal £500k in exchange for a £250k loan from ABL lenders. So, if the acquisition company debenture pays out, the "ex-owner" will get a net £500k less the £60k + ABL fees; if the debenture doesn't pay out, then he walks away with our £250k less £60k+ABLfees. Whether to invest in this loan depends on the value of the debenture in terms of our confidence that it'll pay out, but it sounds to me that the "ex-owner" doesn't have much confidence in the prospect of the pay-out. Add in that this is the first of several/many and it seems like overall confidence in the bonds by the current owners is marginal. The use of beneficiary to describe the lenders relationship to the bonds is curious. If they have not made any matching financial investment to 'own' them then it quickly becomes an each way bet on a two horse race.
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Post by westcountry on Sept 29, 2021 10:54:04 GMT
This loan is the offering trailed in August and discussed in the thread "8% bond 50% LTV" p2pindependentforum.com/thread/18805/8-bond-50-ltv-abl?page=1The security offered appears to me to be a nominal £500,000 debenture on a £60million-turnover company which is making acquisitions and is buying the acquisitions using debentures (presumably payable in three years). One or more of the ex-owners of the acquired companies is prepared to pay £60k plus ABL-fees over three years for the nominal £500k in exchange for a £250k loan from ABL lenders. So, if the acquisition company debenture pays out, the "ex-owner" will get a net £500k less the £60k + ABL fees; if the debenture doesn't pay out, then he walks away with our £250k less £60k+ABLfees. Whether to invest in this loan depends on the value of the debenture in terms of our confidence that it'll pay out, but it sounds to me that the "ex-owner" doesn't have much confidence in the prospect of the pay-out. Having read the borrowing proposal, this is an excellent summary, eeyore , thank you The "put option" for extra security, means that the £60m+ turnover company will buy the £500k debentures back for £250k (the loan amount), should G*** Ltd, the borrowing company who holds the £500k debentures, default on the loan. This appears worthless to me, as the only reason I can see for G*** Ltd to default would be if the debentures didn't pay out. In which case, the £60m+ turnover company would be struggling, and so be in no position to buy back the £500k debentures Overall, I can't see the security on this 8% loan being much better than on 12%/13% loans. I'd have expected a first charge on some tangible assets for 8%!
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baldpate
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Post by baldpate on Sept 29, 2021 11:01:09 GMT
This loan is the offering trailed in August and discussed in the thread "8% bond 50% LTV" p2pindependentforum.com/thread/18805/8-bond-50-ltv-abl?page=1The security offered appears to me to be a nominal £500,000 debenture on a £60million-turnover company which is making acquisitions and is buying the acquisitions using debentures (presumably payable in three years). One or more of the ex-owners of the acquired companies is prepared to pay £60k plus ABL-fees over three years for the nominal £500k in exchange for a £250k loan from ABL lenders. So, if the acquisition company debenture pays out, the "ex-owner" will get a net £500k less the £60k + ABL fees; if the debenture doesn't pay out, then he walks away with our £250k less £60k+ABLfees. Whether to invest in this loan depends on the value of the debenture in terms of our confidence that it'll pay out, but it sounds to me that the "ex-owner" doesn't have much confidence in the prospect of the pay-out. Having read the borrowing proposal, this is an excellent summary, eeyore , thank you The "put option" for extra security, means that the £60m+ turnover company will buy the £500k debentures back for £250k, should G*** Ltd, the borrowing company who holds the £500k debentures, default on the loan. This appears worthless to me, as the only reason I can see for G*** Ltd to default would be if the debentures didn't pay out - in which case the £60m+ turnover company would be struggling & so be in no position to buy back the £500k debentures Overall, I can't see the security on this 8% loan being much better than on 12%/13% loans. I'd have expected a first charge on some tangible assets for 8%! Totally agree. Poor security for 8% return, and too many moving parts!
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withnell
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Post by withnell on Sept 29, 2021 13:35:57 GMT
This loan is the offering trailed in August and discussed in the thread "8% bond 50% LTV" p2pindependentforum.com/thread/18805/8-bond-50-ltv-abl?page=1The security offered appears to me to be a nominal £500,000 debenture on a £60million-turnover company which is making acquisitions and is buying the acquisitions using debentures (presumably payable in three years). One or more of the ex-owners of the acquired companies is prepared to pay £60k plus ABL-fees over three years for the nominal £500k in exchange for a £250k loan from ABL lenders. So, if the acquisition company debenture pays out, the "ex-owner" will get a net £500k less the £60k + ABL fees; if the debenture doesn't pay out, then he walks away with our £250k less £60k+ABLfees. Whether to invest in this loan depends on the value of the debenture in terms of our confidence that it'll pay out, but it sounds to me that the "ex-owner" doesn't have much confidence in the prospect of the pay-out. Having read the borrowing proposal, this is an excellent summary, eeyore , thank you The "put option" for extra security, means that the £60m+ turnover company will buy the £500k debentures back for £250k (the loan amount), should G*** Ltd, the borrowing company who holds the £500k debentures, default on the loan. This appears worthless to me, as the only reason I can see for G*** Ltd to default would be if the debentures didn't pay out. In which case, the £60m+ turnover company would be struggling, and so be in no position to buy back the £500k debentures Overall, I can't see the security on this 8% loan being much better than on 12%/13% loans. I'd have expected a first charge on some tangible assets for 8%! To me it hinges on the arrangement that G*** has with the onward recipient of the funds - if it is done as a loan then is there a recourse to funds in the event of bond/loan default? The proposal talks of personal circumstances and business investment need - business investment is in theory good for our security as it should strengthen the underlying bond issuer, but for personal needs that takes money out of the business (and given the bonds are Euronext tradable why can't they access the funds that way?)
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macq
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Post by macq on Sept 29, 2021 13:45:01 GMT
Having read the borrowing proposal, this is an excellent summary, eeyore , thank you The "put option" for extra security, means that the £60m+ turnover company will buy the £500k debentures back for £250k, should G*** Ltd, the borrowing company who holds the £500k debentures, default on the loan. This appears worthless to me, as the only reason I can see for G*** Ltd to default would be if the debentures didn't pay out - in which case the £60m+ turnover company would be struggling & so be in no position to buy back the £500k debentures Overall, I can't see the security on this 8% loan being much better than on 12%/13% loans. I'd have expected a first charge on some tangible assets for 8%! Totally agree. Poor security for 8% return, and too many moving parts! Too many moving parts sums it up for me as i got as far as - The borrower is a new SPV whose nature of business at companies house is given as - Management consultancy activities other then financial management?? The Trustee is in Singapore the compliance company is in London The overall UK company is listed on the Frankfurt exchange And the bond is listed on the Irish exchange Not sure this is the sort of product that you tick the box on when joining a p2p company as non sophisticated investor but there seem easier ways to invest in bonds (or even the parent company come to that)
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