scooter
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Post by scooter on Feb 13, 2024 22:23:37 GMT
Slippery or slip up? I might get a quicker answer from someone on the forum who didn't take the compound interest option.
The Loan Agreement schedule for this loan shows a re-term Start Date 22/09/2023
Although Kuflink comments state it was agreed in July 23 (see below)
Jul 14, 2023 17:29:49
Since our last update, we have agreed a 6-months extension with our borrower as well as additional funds to allow our borrower to complete the remaining works and exit our loan via sale of the completed units.
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Post by Ace on Feb 13, 2024 22:58:29 GMT
Increased interest has been paid from the 22/09/23 date.
Very strangely, the mezzanine loan for this project wasn't given a rate rise, so the second charge loan is now being paid a lower interest rate than the first charge loan!
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scooter
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Post by scooter on Mar 1, 2024 16:37:55 GMT
Another can kicked today....
How much money has been lent to the borrower (Jul 14, 2023 loan update refers to extra funds) overall?
What is the amounts and rank order of payback by levels of risk?
I now know that the uplift in interest has been paid since Sept 23 (although Kuflink has not answered the question) Will Kuflink be backdating it to July when it was agreed? If not, how do they explain the misleading information provided to investors?
I can see that there are tranches 8-16 issued for which Kuflink are hiding the data from existing investors against COBS 18.12.31R09/12/2019 Ongoing disclosures. I would like access to all of the valuation reports please. If Kuflink's compliance team has an issue with this as previously mentioned, I would like a response as to why. I haven't had one
Kuflink Loan Case - "A 12-month term has been provided and interest will be retained for the term duration."
I would like Kuflink to explain to difference between "Term duration" and the "12 month Term". I would say there is no difference.
- Kuflink are applying the phrase to mean when the loan is paid off. I opted for compound interest for the term, the term that is 12 months and plainly stated on the Loan case! I could accept being paid out at 12 months and Kuflink starting to compound the interest again, but that is not the case.
- If the loan was in default (Can anyone believe it is not) and failed to pay back in full, would I get my full compounded interest like those who opt for monthly interest have already had their full 12 month interest. I can't find any reference to that scenario.
- Kuflink cannot be acting in an unbiased way when they get to keep the money and earn intertest on it until the loan is paid out in full. I would like an explanation.
I note that this was a 12 month project lending £1.5m for 10 apartment intended to return £2.3m. 6 flats at £220k, 2 at £240k and 2 at 250k
- The borrowers estimated build costs were £1,531 per sq. m. the valuation stated £2,679 Per Sq. m. A whopping 75% difference in expectation of costs.
- Kuflink was advised to request the Quantity Surveyor to confirm to you that the declared outstanding build costs of £850,000 will be sufficient to complete the project from its current stage. The valuation advice assumes that it will be, but Kuflink were asked to refer this matter back to the valuer for additional commentary as the valuation would be affected. I would like to know what the QS said at the time, or even if they were consulted.
- I now can see that the flats are being marketed at £2.6m for the lot (Since the end of January) or £290k - £322k individually.
It seems like, once again, Kuflink want to hold hands with the borrower whilst kicking the investors in the teeth. The loan was only for £1.5m with interest withheld. Why can't it just go to auction and be done with it? Why are Kuflink dragging this out even longer, instead of clearing the debt with a quick sale? Because Kuflink gave them more money (Perhaps 75% more) that we never signed on for, don't know how much it was and don't know where it ranks risk wise. And they won't provide the valuations to tell us.
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Post by Ace on Mar 1, 2024 16:51:48 GMT
FYI monthly interest was paid on both the first charge and mezzanine loans today to those that selected the monthly option. Still a lower rate for the higher risk loan!!!
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scooter
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Post by scooter on Mar 1, 2024 19:07:17 GMT
OMG. I just sold this one. Sorry to whoever bought it, but i did try and warn you.
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deltron
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Post by deltron on Mar 2, 2024 0:33:28 GMT
Could anyone explain the order of priority for repaying this loan? Only the first tranche had two tiers (afaik). That should mean that the 2nd tier and all further tranches rank equally in repayment priority, correct? So does that mean the first tier of the first tranche is paid back before everyone else? Just trying to decide whether to sell the tiny chunk I have in this loan, and if it is only £340,000 that is required from sales to cover the first tier of the first tranche then I'll stick with it.
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rocky1
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Post by rocky1 on Mar 2, 2024 7:23:05 GMT
first tier first tranche pays back capital plus interest before any 2,3,4 tiers on any tiered loan. surely you read the lending case on any tiered loans you lend to.it says read and understand the tiered loans T&Cs. just click on it.
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Post by overthehill on Mar 2, 2024 9:33:00 GMT
first tier first tranche pays back capital plus interest before any 2,3,4 tiers on any tiered loan. surely you read the lending case on any tiered loans you lend to.it says read and understand the tiered loans T&Cs. just click on it.
Reading the help article wouldn't help, as it doesn't explain the priority situation where tranche 2 with no tiers follows tranche 1 with tier 1 + tier 2. Is tranche 2 tier 1 or tier 2 ?
===================
Loan Tiers
Essentially Kuflink’s Loan Tiers are risk bands that are measured by Loan to Value. We will be offering multiple Tiers on certain Select Invest loans making it easy for you to choose what is right for you.
Kuflink splits a Borrower’s loan requirement into multiple parts creating Loan to Values for each
Example
Whole Loan 75% LTV
Tier No. LTV Order of Priority
Tier 1 22% 1st
Tier 2 46% 2nd
Tier 3 62% 3rd
Tier 4 75% 4th
Please remember that the LTV for tiered loans may vary from the above example so please ensure you check what LTV applies to the tier and loan that you are looking to invest in.
Each Tiered Loan will have a different Interest Rate depending on the LTV that applies to it. For example, by accepting Tier 4. as above, you are accepting a Higher LTV risk and you are accepting being paid last, as listed above in the order of priority, all in consideration for a higher interest rate.
With Tiered Loans, the lender not only gets to choose which loans they want to invest in but also the level of risk within that loan.
Each Loan Tier will then have a different return rate depending on the LTV bracket that applies to it – the higher the LTV risk you are willing to accept, the higher rate of return you could earn.
Loan Tiers could help you balance your risk exposure by allowing you to further diversify your Kuflink investment portfolio according to your personal risk appetite and investment plan.
Order of Priority
Order of Priority, when capital and interest is repaid.
Whilst the whole loan is secured by way of a 1st or 2nd legal Charge over the security property, the Tiers are ordered by priority. So, in the above example, Lenders who have lent funds in Tier 1 will be paid first on any capital and interest repayment, then Tier 2, then Tier 3, and then Tier 4. When Lending in Tiered Loans, you and all lenders in all the Tiered Loans of the security charge are accepting the order of priority, linked to LTV's, when you invest.
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rocky1
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Post by rocky1 on Mar 2, 2024 9:59:51 GMT
the way i have took it that even if there were 10 tranches in tier 1 capital and interest would be paid in descending order 1-10 before anything even went to tier 2 lenders. i doubt there would be enough to pay all tier 1 really with all the costs that seen to build up when these loans go on forever.
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scooter
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Post by scooter on Mar 2, 2024 10:16:23 GMT
Could anyone explain the order of priority for repaying this loan? Only the first tranche had two tiers (afaik). That should mean that the 2nd tier and all further tranches rank equally in repayment prio rity, correct? So does that mean the first tier of the first tranche is paid back before everyone else? Just trying to decide whether to sell the tiny chunk I have in this loan, and if it is only £340,000 that is required from sales to cover the first tier of the first tranche then I'll stick with it. Please, just sell it. I can't see how this loophole can continue..... COBS (11) whether the firm considers that the borrower is unlikely to pay its obligations under the P2P agreement in full without the firm enforcing any relevant security interest or taking other steps with analogous effect and, if so, information to that effect; and (12) whether a default by the borrower under a P2P agreement has occurred and, if so, information to that effect. Kuflink think this part of COBs only applies to the secondary market. I would say it doesn't even apply to the secondary market. I sold two more which were just rolled over for just over one month yesterday......
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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 Mar 2, 2024 11:02:51 GMT
first tier first tranche pays back capital plus interest before any 2,3,4 tiers on any tiered loan. surely you read the lending case on any tiered loans you lend to.it says read and understand the tiered loans T&Cs. just click on it.
Reading the help article wouldn't help, as it doesn't explain the priority situation where tranche 2 with no tiers follows tranche 1 with tier 1 + tier 2. Is tranche 2 tier 1 or tier 2 ?
Why would it? It isnt relevant. Whats important is the ranking between the tranches & how does interest rank which is covered here kb.kuflink.com/knowledge/how-are-development-tranches-paid-backSo pari passu. In that case all the the tranches will be repaid in proportion to the sum recovered, then the tiers in tranche 1 will be applied. So if the loan is for a total of £1m & only £800,000 is recovered, all tranches will repay 80%. If tranche 1 is for £200k split into two tiers of £150k & £50k, then the £160k recovered on tranche 1 will be used to pay tier 1 capital & interest and any remainder will go to tier 2. If more than the capital is recovered but not enough to repay interest in full, then all tranches will get the same proportion of interest paid, tranche 1 will then apply the tier priority So on £1m loan above say £100k interest is owed but only £1.05m recovered. All tranches get capital & 50% of interest due, except tranche 1 which gets £210k (ie 20% of total), so capital & interest for tier 1 in full (£150k plus £15k interest (75% of the interest owed for tranche 1) & tier 2 gets a 90% capital repayment (£45k) & no interest. The question that needs answering is how is interest treated for loans that arent pari passu, where some tranches have a higher ranking priority. Do Kuflink have any such loans? If not question is irrelevant
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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 Mar 2, 2024 11:05:07 GMT
Could anyone explain the order of priority for repaying this loan? Only the first tranche had two tiers (afaik). That should mean that the 2nd tier and all further tranches rank equally in repayment priority, correct? So does that mean the first tier of the first tranche is paid back before everyone else? Just trying to decide whether to sell the tiny chunk I have in this loan, and if it is only £340,000 that is required from sales to cover the first tier of the first tranche then I'll stick with it. No, all tranches are paid back equally, then the tier priority is applied to the sum received for tranche 1. Incidentally the way the LTV is shown looks highly misleading as to the unwary it implies that both tiers have a lower risk than the rest of the tranches. Tier 2 should clearly be higher risk than the overall loan as a whole due to tier 1 interest ranking higher.
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Post by Ace on Mar 2, 2024 11:40:57 GMT
I've removed my earlier post as I was wrong on some points, and ilmoro has covered the issue much better above. |
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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 Mar 2, 2024 12:04:27 GMT
I've removed my earlier post as I was wrong on some points, and ilmoro has covered the issue much better above. I think the points you made in relation to tier 2 lenders not having a clue where thy sit in the capital stack were important. To me it looks like lenders cant have a clue on what the risk of this loan is (unless there are direct updates not provided on the platfrom. The key point is if the interest starts accruing rather than being retained then the Tier 2 risk becomes dynamic, changing on a daily basis as Tier 1 interest moves ahead of Tier 2 capital. I cant see anywhere that Kuflink spells out this additional risk other than in general terms. ie T2 more risky than T1
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Post by Ace on Mar 2, 2024 12:20:07 GMT
I've removed my earlier post as I was wrong on some points, and ilmoro has covered the issue much better above. I think the points you made in relation to tier 2 lenders not having a clue where thy sit in the capital stack were important. To me it looks like lenders cant have a clue on what the risk of this loan is (unless there are direct updates not provided on the platfrom. The key point is if the interest starts accruing rather than being retained then the Tier 2 risk becomes dynamic, changing on a daily basis as Tier 1 interest moves ahead of Tier 2 capital. I cant see anywhere that Kuflink spells out this additional risk other than in general terms. ie T2 more risky than T1 Agreed. They should also put the important points of that knowledge article in the T&Cs; particularly that Tranches rank equally before applying Tier priorities. I just searched them now (last updated 28/2/24) and the word "tranche" doesn't even appear. Is it legal to keep updating the T&Cs without informing lenders as to what they've added/deleted/changed? There seems to be some new sections added since I last read them. They seem to have had a stab at defining how the auto accounts work, Section 23. "Investment Recovery Process in Auto Pool". I can't say that I fully understood it on a first reading, but I only have a very small chunk in Auto, so not overly bothered.
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