adrianc
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Post by adrianc on Mar 17, 2016 8:37:31 GMT
And here they are. Finally.
Repeat of what I said over in the Pipeline thread, so it doesn't get lost...
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locutus
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Post by locutus on Mar 17, 2016 9:03:20 GMT
I think these will struggle without bonuses. I agree that residential conversion looks ambitious but as long as the security is solid, does is matter to investors?
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adrianc
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Post by adrianc on Mar 17, 2016 9:43:07 GMT
Yes, carrying on the from Pipeline thread, I asked which live SS loan has the same borrower as the now newly numbered PBL87/88. I think it may be PBL33. Different companies, same directors. ...and not only in the same game, but just a couple of miles up the road. It has to be the obvious candidate.
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Post by Deleted on Mar 17, 2016 9:45:08 GMT
Also think they will struggle to get this filled at the moment unless Saving Stream have got a few BH'ers waiting in the wings.
Notice they mentioned ' We reserve the right to cancel or extend this go live date if required ', think the smaller BTL loan will definitely go live on Friday.
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Post by savingstream on Mar 17, 2016 9:45:32 GMT
Adrianc is missing the point. This is a short term loan secured on assets with a defined market value. There are restrictions on a change of use in place for 2 years and in the meantime, there is over £600k worth of income coming in. They have development funding agreed for when the restrictions are removed for any scheme that they finalise. Our interest is in the value of the asset and the exit strategy, both of which are very solid. The sales of the units in 3/4 years time is beyond our strategic risk horizon.
Within 2 years, the borrowers will have 1: added value through the planning system; 2: Removed the RCs thus increasing the value of the asset by over 20%. If they choose to retain the assets with current use, the value will have increased and they can sign a new long term contract with existing tenants which will increase the value of the asset as well.
Plenty of options, increasing asset value, solid valuations. We are comfortable with this loan and the borrower.
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adrianc
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Post by adrianc on Mar 17, 2016 9:49:23 GMT
Adrianc is missing the point. This is a short term loan secured on assets with a defined market value. There are restrictions on a change of use in place for 2 years and in the meantime, there is over £600k worth of income coming in. They have development funding agreed for when the restrictions are removed for any scheme that they finalise. Our interest is in the value of the asset and the exit strategy, both of which are very solid. The sales of the units in 3/4 years time is beyond our strategic risk horizon. Within 2 years, the borrowers will have 1: added value through the planning system; 2: Removed the RCs thus increasing the value of the asset by over 20%. If they choose to retain the assets with current use, the value will have increased and they can sign a new long term contract with existing tenants which will increase the value of the asset as well. Plenty of options, increasing asset value, solid valuations. We are comfortable with this loan and the borrower. Maybe I am, maybe I'm not. If neither conversion to residential or the RCs affect the value, and they're completely irrelevant to the whole deal - including the borrower's exit strategy - then I wonder why the valuation mentions them so heavily, and why just yesterday you posted... The delay was caused by a couple of Restrictive Covenants being in place that prevents a change of use until March 2018. The values got knocked by c 20% so we have amended the loan offer to reflect this. Our borrower is very close to getting these RCs removed anyway, and is with the lawyers now. Probably a month or 2 away which will put the values back up to where we were originally. ...and, indeed, how they'll be "adding value through the planning system" without that change of use. Because otherwise the change of use is very relevant to the whole deal, and that's the bit that makes me scratch my head. You aren't the only ones interested in the exit strategy and the value of the asset, y'know.
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SteveT
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Post by SteveT on Mar 17, 2016 10:02:14 GMT
Suspect the explanation is mainly to clarify the changes in valuation and LTV versus the original pipeline figures.
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Post by Deleted on Mar 17, 2016 10:14:57 GMT
Suspect the explanation is mainly to clarify the changes in valuation and LTV versus the original pipeline figures. I'm trying to figure out why the loan required has gone up from 8m to 9.25m after 20% was knocked off the valuation because of the restrictive covenants. Also, 'Our borrower is in the process of removing the RCs and is confident that will only take 3 months' - so the restrictive covenants will be removed in 3 months ? , if this is the case, can some funding be held back until the RCs are removed.
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Post by Deleted on Mar 17, 2016 10:31:23 GMT
I'm just going in with a base minimum to continue my diversification strategy. I see Watford as being a bit like Hull without any of the classy bits  |
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brin
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Post by brin on Mar 17, 2016 10:42:57 GMT
from what i read, it seems to look ok, SS are saying the property as it stands has a definite value within its present trading position, and even if the covenants and the planning permission are not gained, it will still have a final value, after refurbishment, far higher than its present value, even if it carries on trading as is.
the only thing i am not sure about is what exactly is the exit strategy, should the planning etc fail.
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Post by mrclondon on Mar 17, 2016 11:18:21 GMT
I'll add a longer post on these loans later, but in the meantime a question for savingstream - have your legal team had sight of detailed land contamination surveys given the site used to be an asbestos factory ? |
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Post by Deleted on Mar 17, 2016 11:33:03 GMT
Thanks but no thanks, pre-funding set to zero, will use the opportunity to pick up other loans on the secondary market.
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Post by Deleted on Mar 17, 2016 11:35:34 GMT
from what i read, it seems to look ok, SS are saying the property as it stands has a definite value within its present trading position, and even if the covenants and the planning permission are not gained, it will still have a final value, after refurbishment, far higher than its present value, even if it carries on trading as is. the only thing i am not sure about is what exactly is the exit strategy, should the planning etc fail. If it was true that the restrictions should be lifted in three months and that there is development finance ready, I am not sure what is SS money for.... Also we should be very careful. Any cost of decontamination/removal of eventual abestos still present onsite will certainly eat a lot on the value of the site itself.
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brin
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Post by brin on Mar 17, 2016 11:54:03 GMT
from what i read, it seems to look ok, SS are saying the property as it stands has a definite value within its present trading position, and even if the covenants and the planning permission are not gained, it will still have a final value, after refurbishment, far higher than its present value, even if it carries on trading as is. the only thing i am not sure about is what exactly is the exit strategy, should the planning etc fail. If it was true that the restrictions should be lifted in three months and that there is development finance ready, I am not sure what is SS money for.... Also we should be very careful. Any cost of decontamination/removal of eventual abestos still present onsite will certainly eat a lot on the value of the site itself. that is a pertinent point which i am sure SS have considered and included in the due diligence, the finance is.... "They are seeking a loan to repay another lender and to provide costs for substantial further planning amendments on this and another site" from the further info section, with regards to the PBL087
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Post by highlandtiger on Mar 17, 2016 11:54:14 GMT
yet again people are over thinking this. We only need to know how long the loan is for and will the value of the property be the same or higher at the end of the loan period.
I don't care about developers plans or asbestos etc They have no bearing on the loan or current valuation.
At this rate most of you will be talking yourselves out of every loam that appears.
You are getting 12% interest and for that you do have to accept some risks
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