We have an interesting loan coming for you.

I've discussed this with the credit team and have the following information to share.

It is common for a company of this size and nature to be able to borrow funds without specific tangible and direct asset security and instead lenders are protected through covenants.  As detailed in the credit report there is a current asset cover of 1.75 times, and crucially a market capitalisation / debt covenant which states that the market cap should be at least 4 times debt.  These two, in combination with the interest and leverage covenants that are also in the credit report, provide both a security level and a time element for the company to remedy as a variety of financing options would be open to them, which could include raising further equity.  Given the nature of being a public company and with a current market capitalisation of around £13.5m we trust you understand we cannot speculate further on such matters.

I've also suggested to the rest of the management team that for all our big loans, and certainly those of a slightly more complex nature like this one, we'll organise a conference call where lenders can discuss concerns directly with the team, so that we can help you all understand each loan, the risks, and the mitigants so that you can make an educated investment decision.  Even if you choose not to invest at least we can be sure then that it's for the right reasons rather than just because we hadn't made something clear.  The rest of the team have accepted that this would be a good idea to at least trial so hopefully we'll be able to announce something along those lines in the next week.  In the mean time feel free to use the Q&A functionality or phone the lender support team directly.  I'll also do my best to keep an eye on the forum over the weekend.

It's back I see! Was this ever in the upcoming or did it go straight from pipeline to live?

Ive now read this twice through. Whilst I think I get the main principles and they seem sound, I really don't get how the numbers and security stack up. I may give it a third read after a nights sleep, but my current thinking is a pass with 'I don't understand enough' as my justification. Not that may involvement would be more than a rounding error for some people!

Can you confirm that the QAA did not underwrite this loan?

The QAA holds some loan units in the loan but we don't currently divulge the makeup of the holdings.  You can speak to the customer services team if you want to find out more as they may have a more in depth answer than I can give.