j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Mar 30, 2014 10:42:55 GMT
Offering 10& pa
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Post by Ton ⓉⓞⓃ on Mar 30, 2014 10:48:03 GMT
Just opened for bidding
IN EDIT. It seems a fairly standard only three years long before refinance, agreement to sell the electricity already in place. Interest only for 12m then a balloon of 22k capital then onto a normal 5% amortizing loan. Only slightly unusual thing being this time the money will be held escrow. Anything I've missed?
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Post by chris on Mar 30, 2014 10:49:50 GMT
Apologies for people being unable to bid. The database was set to the wrong timezone (UTC vs BST) so the clock didn't change overnight. This led the web servers to think the auction was live and the database to erroneously think it wasn't.
This has been corrected. There was a period of around 30 seconds where the website was unavailable as changes were being made.
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Post by Ton ⓉⓞⓃ on Mar 30, 2014 11:25:35 GMT
I don't see escrow as an issue it's probably just the way that Kin***** do their agreements. It should be fairer to both sides.
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j
Member of DD Central
Penguins are very misunderstood!
Posts: 2,188
Likes: 540
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Post by j on Mar 30, 2014 16:48:52 GMT
Since there are now three separate threads for the same loan! Can mods please combine all 3 into one for simplicity?!
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Post by bracknellboy on Mar 30, 2014 17:10:31 GMT
done
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j
Member of DD Central
Penguins are very misunderstood!
Posts: 2,188
Likes: 540
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Post by j on Mar 30, 2014 17:49:11 GMT
Thank you! I was getting dizzy following all three at once
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j
Member of DD Central
Penguins are very misunderstood!
Posts: 2,188
Likes: 540
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Post by j on Mar 31, 2014 21:25:04 GMT
Apart from diversification, I do not see much more appeal in this loan or its sister loan in Cumbria. I feel there's better value & higher return even in the short-term bridging loans.
Am I missing something between the lines or is it just my misguided judgement?!
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Post by Ton ⓉⓞⓃ on Mar 31, 2014 21:50:23 GMT
Apart from diversification, I do not see much more appeal in this loan or its sister loan in Cumbria. I feel there's better value & higher return even in the short-term bridging loans. Am I missing something between the lines or is it just my misguided judgement?! There's a lot in what you say. You don't want too much of a very similar type of investment despite both being SPV's from Kin*****. But still it's a good solid but boring return. Boiler man is plain and simple but it does the job and is fairly certain, it's these 10%ers that are going to be/are the backbone of a portfolio. What do you think? I'm wondering what is a safe level of turbines, as AC said they had a few coming along, though I've no idea how many.
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pikestaff
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Post by pikestaff on Mar 31, 2014 22:27:18 GMT
I'm not that keen on bridging loans. I think AC in general is too dependent on the property market, so I consider wind farms at 10% to be a welcome diversification. They should be low risk as well.
The main issue with Burnley and Cumbria is the balance sheet of the developer. I think this is only a short term concern, because SPVs are used and everything to do with operations will be contracted out, but it's still a slight worry. Presumably that's why we get the opportunity to lend, instead of it going to a mainstream lender.
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Post by Ton ⓉⓞⓃ on Mar 31, 2014 22:37:06 GMT
I'm not that keen on bridging loans. I think AC in general is too dependent on the property market, so I consider wind farms at 10% to be a welcome diversification. They should be low risk as well. The main issue with Burnley and Cumbria is the balance sheet of the developer. I think this is only a short term concern, because SPVs are used and everything to do with operations will be contracted out, but it's still a slight worry. Presumably that's why we get the opportunity to lend, instead of it going to a mainstream lender. When you say the balance sheet is an issue are you saying they don't have any assets or cash. I'm not sure exactly what you're getting at?
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mikes1531
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Post by mikes1531 on Apr 1, 2014 1:05:51 GMT
Apart from diversification, I do not see much more appeal in this loan or its sister loan in Cumbria. I feel there's better value & higher return even in the short-term bridging loans. Am I missing something between the lines or is it just my misguided judgement?! You may already have considered this, but these loans are longer term and therefore might have the advantage of not needing the constant attention to reinvestment that a portfolio of short-term bridging loans requires. Also, longer loans with payments that are greater than just interest-only have the advantage that if everything else stays constant the LTV will improve over the term of the loan. Of course, it's rare that "everything else stays constant", so longer-term loans could be viewed as having more time for the borrower to run into a problem. I'm intending to pick of a bit of each of the wind turbines when/if they appear on the AM at a time when I have funds available, but that's mostly because I'm still trying to balance and diversify my AC portfolio.
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pikestaff
Member of DD Central
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Post by pikestaff on Apr 1, 2014 7:47:24 GMT
I'm not that keen on bridging loans. I think AC in general is too dependent on the property market, so I consider wind farms at 10% to be a welcome diversification. They should be low risk as well. The main issue with Burnley and Cumbria is the balance sheet of the developer. I think this is only a short term concern, because SPVs are used and everything to do with operations will be contracted out, but it's still a slight worry. Presumably that's why we get the opportunity to lend, instead of it going to a mainstream lender. When you say the balance sheet is an issue are you saying they don't have any assets or cash. I'm not sure exactly what you're getting at? Look them up on Duedil and you will find they have negative net assets. Someone has asked about this in the Q&A, describing them as "insolvent". No reply yet. I don't think "insolvent" is a correct description. Companies are not insolvent solely because their accounts show negative net assets, and I can think of a few reasons why they might be in this position yet be perfectly OK (which is what their credit score suggests). All that really matters is whether the income stream from their developments is sufficient to service their debts. If it is not, they will eventually go bust unless they raise more capital. I am not overly worried about this, for the reason stated in my previous post, but it is something to be aware of.
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jonno
Member of DD Central
nil satis nisi optimum
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Post by jonno on Apr 1, 2014 8:57:25 GMT
I agree with Pikestaff.I think we may have become a little spoilt with recent returns in excess of 10%.However, a solid return from companies such as this with as certain an income stream as we're likely to get should be an intrinsic element of a balanced portfolio.
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koba
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Post by koba on Apr 1, 2014 9:08:26 GMT
I think you will find they are funded by a combination of equity and shareholder's loans. New long term loans of £1.65 million seem to have been extended by shareholders in 2013. A proportion of trade debtors and trade creditors also seems to be to related parties. Clearly, the fact that they are burning through cash so fast needs to be queried but "insolvent" is not a word that I would use in the circumstances.
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