Bagman
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Post by Bagman on Feb 26, 2015 14:26:12 GMT
Just got the email on this one, and as I am holding some of the lenders defaulted previous loan I am not going to be renewing my investment in this one..
We will be posting a new loan tomorrow, Friday 27th February, at 12 noon. This loan is a renewal of previous loan ID: 644445033. The loan is for £20,000 secured against a large collection of art.
The loan is offering interest to savers of 13% pa
Savers will be restricted to a maximum bid of £500 for the first 24 hours.
Roll-Over Requests
If you have an investment in loan ref 644445033 you have the option of rolling-over the capital into the new loan which will be for a maximum period of 6 months. The interest will, in any case, be paid into your account, Click here for further details
NOTE: In the interests of full disclosure the borrower has previously defaulted on loan ID: 654474218
At the time the previous loan was due the borrower was in a difficult financial position and the loan defaulted. The paintings from that loan (also Lubins) are in the process of being sold to recover funds.
However as the borrower is now in a better financial position they have repaid the interest due, to renew this loan for a further six months..
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coop
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Post by coop on Feb 26, 2015 14:51:22 GMT
They haven't sold the defaulted ones yet but he's "in a better financial position". He clearly doesn't intend to buy the unsold paintings back which implies to me he'll struggle to repay this loan too...
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bugs4me
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Post by bugs4me on Feb 26, 2015 15:13:26 GMT
They haven't sold the defaulted ones yet but he's "in a better financial position". He clearly doesn't intend to buy the unsold paintings back which implies to me he'll struggle to repay this loan too... Hopefully he will be able to repay but in my book the most important thing is the LTV - just how realistic is it. Looks like FS have dropped the original valuation from 35k to 30k which doesn't inspire confidence. I'll ponder for a while before rolling over if at all.
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jonno
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nil satis nisi optimum
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Post by jonno on Feb 26, 2015 15:38:51 GMT
I don't think I'll be touching this one with the proverbial
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mikes1531
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Post by mikes1531 on Feb 26, 2015 15:55:15 GMT
They haven't sold the defaulted ones yet but he's "in a better financial position". He clearly doesn't intend to buy the unsold paintings back which implies to me he'll struggle to repay this loan too... Hopefully he will be able to repay but in my book the most important thing is the LTV - just how realistic is it. Looks like FS have dropped the original valuation from 35k to 30k which doesn't inspire confidence. Having lowered the value, the LTV on the renewal loan will be 67%. In light of the fact that the first collection (LTV = 41%) didn't sell easily, this LTV looks dangerously high. Since the borrower's improvement in their financial situation wasn't enough to allow them to redeem any of the first batch of paintings at something like 50% of their 'value' -- and it doesn't appear that anyone is rushing to buy them at that price either -- I don't think it bodes well for the prospects of selling another batch of this artist's paintings at 80+% of 'value' in seven months' time. (That's what would be necessary if the borrower doesn't redeem the second collection when the rolled-over loan matures.) How many Lubins can the market absorb in such a limited period? It would seem, therefore, that the success of the renewed loan may depend on the borrower's financial position continuing to improve to the point where they can repay the loan. I haven't a clue how likely that is, so I've decided not to take the risk and have cancelled my rollover instruction.
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coop
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Post by coop on Feb 26, 2015 16:00:41 GMT
Yup, the drop in valye is obviously linked to struggling to get the paintings away at all!
Perhaps FS could enlighten us as to where they were listed - possibly they're even open to suggestions if anyone has any knowledge/contacts in the field?
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bugs4me
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Post by bugs4me on Feb 26, 2015 16:37:02 GMT
Hopefully he will be able to repay but in my book the most important thing is the LTV - just how realistic is it. Looks like FS have dropped the original valuation from 35k to 30k which doesn't inspire confidence. Having lowered the value, the LTV on the renewal loan will be 67%. In light of the fact that the first collection (LTV = 41%) didn't sell easily, this LTV looks dangerously high. Since the borrower's improvement in their financial situation wasn't enough to allow them to redeem any of the first batch of paintings at something like 50% of their 'value' -- and it doesn't appear that anyone is rushing to buy them at that price either -- I don't think it bodes well for the prospects of selling another batch of this artist's paintings at 80+% of 'value' in seven months' time. (That's what would be necessary if the borrower doesn't redeem the second collection when the rolled-over loan matures.) How many Lubins can the market absorb in such a limited period? It would seem, therefore, that the success of the renewed loan may depend on the borrower's financial position continuing to improve to the point where they can repay the loan. I haven't a clue how likely that is, so I've decided not to take the risk and have cancelled my rollover instruction. AFAIK, we have no idea who was responsible for the original valuation even though each painting is itemised. It appears as though FS have decided themselves to reduce the valuation so I assume that the original valuation was made by FS themselves. Now the LTV is at 67% I will not be rolling over
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spockie
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Post by spockie on Feb 26, 2015 17:33:33 GMT
Just got the email on this one, and as I am holding some of the lenders defaulted previous loan I am not going to be renewing my investment in this one..
Yes, I shall not be renewing for the same reason.
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Post by mrclondon on Feb 26, 2015 18:12:37 GMT
As the single biggest lender across the 2 loans combined, I'm also hoping to reduce my exposure to this borrower by not renewing. Whether I achieve this depends on whether there are enough new + renewing lenders to re-fill the loan. If not this loan will presumably also default unless the borrower can make up the shortfall.
Will be very interesting to watch.
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Post by bracknellboy on Feb 26, 2015 18:16:05 GMT
As the single biggest lender across the 2 loans combined, I'm also hoping to reduce my exposure to this borrower by not renewing. Whether I achieve this depends on whether there are enough new + renewing lenders to re-fill the loan.... I'm not convinced that post increases the odds of achieving your aim...... :-)
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alison
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Sanctuary!!
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Post by alison on Feb 26, 2015 18:16:56 GMT
As the single biggest lender across the 2 loans combined, I'm also hoping to reduce my exposure to this borrower by not renewing. Whether I achieve this depends on whether there are enough new + renewing lenders to re-fill the loan. If not this loan will presumably also default unless the borrower can make up the shortfall. Will be very interesting to watch. Good luck mrc. I'm following the Duncan Bannatyne approach. (He hasn't invested this series has he?) Fortunately only have £100 in the loan currently in default.
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mikes1531
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Post by mikes1531 on Feb 26, 2015 20:40:56 GMT
... I'm also hoping to reduce my exposure to this borrower by not renewing. Whether I achieve this depends on whether there are enough new + renewing lenders to re-fill the loan. If not this loan will presumably also default unless the borrower can make up the shortfall. At this point FS have somewhat committed to the borrower that they can continue the loan. While I realise that it always has been the case that loans are dependent on FS having enough lenders to fund any loan offer they make, if there were to be insufficient funds to roll this loan over then FS would be left with egg on their face, so to speak. And that would be the first unfunded loan I can remember for quite a while, though I'll be the first to admit my memory for such things isn't the best. A failure to fund obviously could put a dent in FS's credibility as a lending source, and I expect they'd want to avoid that if at all possible. I expect FS will have been paying attention to lenders' rollover settings and have been watching carefully as the green tick symbols turn into red 'X's. No doubt they'll be watching as the loan goes live tomorrow and if it doesn't fill immediately -- as I expect it won't -- then they'll be watching closely on Saturday to see how many of the £500 bidders -- presuming there are some -- increase their bids when the maximum bidding limit expires. And if there's still a significant funding gap to fill by Monday morning I'd expect FS to get busy trying to stir up some offers from their underwriters. If the discussion here is representative, then I'd expect they'll need to offer some incentives to encourage more offers. Then again, there are bound to be a goodly number of FS lenders who would bid on any loan offering 13% interest, so maybe there won't be an issue at all. Yes, indeed. This one is going to be interesting.
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bugs4me
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Post by bugs4me on Feb 26, 2015 20:42:25 GMT
As the single biggest lender across the 2 loans combined, I'm also hoping to reduce my exposure to this borrower by not renewing. Whether I achieve this depends on whether there are enough new + renewing lenders to re-fill the loan.... I'm not convinced that post increases the odds of achieving your aim...... :-) The positive is that FS have managed to increase their lender base by a significant number and very few visit this forum - all supposition on my part though. So this loan could just be a flyer.
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Post by Duane Dibley on Feb 26, 2015 20:46:41 GMT
I doubt if many existing investors will be renewing their loans given the default on the other loan.
However I don't think FS will have much difficulty filling the loan, new investors have been piling in left, right and centre recently, mesmerized by the headline rate and apparently caring little for the underlining security of the loans.
Will be glad to be out of this one.
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ramblin rose
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Post by ramblin rose on Feb 27, 2015 10:22:11 GMT
As the single biggest lender across the 2 loans combined, I'm also hoping to reduce my exposure to this borrower by not renewing. Whether I achieve this depends on whether there are enough new + renewing lenders to re-fill the loan. If not this loan will presumably also default unless the borrower can make up the shortfall. Will be very interesting to watch. Don't worry mrclondon, there will be at least me prepared to face this risk and renewing, and like others, I believe there will then be more than enough with enough appetite for risk or just unthinking new lenders piling in to ensure left over capacity is easily filled.
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