koba
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Post by koba on Apr 23, 2014 16:00:32 GMT
Regarding Ranbling Rose's comments above it is worth noting that this thread has had well over 1500 hits since Monday. Wonder what this is communicating to the wider community? Caveat Emptor I would have thought 
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Post by Ton ⓉⓞⓃ on Apr 23, 2014 16:09:28 GMT
The underwriters and not the undertakers have just been called in... Now 56% full from 2%, a cool quarter of a mil. plus a little bit... In EDIT. I wonder how long it will take to unload on the AM? Hackney will look positively fleet-footed... To be clear I'm still intending to buy some of this when it does come on thou'. This is now a dead cert to drawdown and cashback. This is now no longer about Auction 87 Am I misunderstanding you,or do you really think this will be drawndown and available on AM by end of the month (or even just drawndown) given your reference to cashback? p.s. I wouldn't buy this one in the Afterlife,never mind the Aftermarket. Perhaps I misunderstand how cashback works, but so long it is drawn down even if it's in May or June it's included in the cash back offer AIUI, and, as spockie correctly reminds me, the initial investment must be the April period. I am going to buy it in this life. Very good joke of yours. I'm talking about a few hundred pounds no great investment. If AC sticks to B&M as the only asset they deal in then they will remain in a back water, AC have to go for the more adult deals if they're stick to 100million in 11months time. All this is in order to survive in the long term. It's grow or die and if AC do die they can of course talk to all their failed loans in the afterlife.  ramblin rose I fully agree with your last post about timing/notifying this change.
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Post by andrewholgate on Apr 23, 2014 16:12:29 GMT
It seems to me, Andrew, that your misjudgement here was to put something so radically different up on the site going into the Easter weekend when none of you were liikely to be able to explain to your loyal lenders what was going on. The worst of the rising hysteria and invective would probably have been avoided if you had accompainied the launch of said loan with some explanation of the reasoning that you gave in the post I reference here. Most probably still won't like the risk, such as myself, but as you say, they could just stay out of it. Maybe the main lesson here should be that when you next make a new experimental loan into something very different, you could be a little more mindful about communicating the reasons before people get themselves worked up into a lather. (Yes, I can be a real self-righteous little madam when I want to be ) Yes, pretty much as we did with the wind turbine deal where we had an education document to go with it. Problem partly stemmed from me being away and having a reduced team. Point noted and we will have something drawn up and distributed. A
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bugs4me
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Post by bugs4me on Apr 23, 2014 16:18:06 GMT
I've been tempted back into the fray given the appearance of a moderator and also some supportive comments by others. I will not hide away and have been very accessible to all of you over the last 12 months. The fact I go away over easter and was pretty much out of contact (albeit lurking) seems to have caused panic amongst some on the forum. Expecting an immediate answer on Easter Sunday is a little too much. As AC gets busier, I do find it harder to be constantly on here, but I do remain and I do continue to post..................................................................................The tangible is also being lost along the way. Stock is a tangible asset, it is there, it has a value and we have assessed the value of a distressed sale to be sufficient to recover the debt should it be needed. Stock carries a higher risk than having a solid property, and we have taken a much reduced value when assessing the stock. The debenture does give us step in rights where required, and is the "legal charge" that we use to take ownership of the stock of required. The PG in this case is unsupported and should be viewed as nil value, but also has some psychological value in keeping the chairman honest. The main reasons for doing this loan are the strong cash flow in the business (remember, cash not profits), the rapid amortisation (full repayment over 3 years) and the value of the stock supporting the loan. The current loan is one we are trying to see the reaction we get. In order to stay competitive we have to diversify, in the same way the FC have started to offer property loans, Zopa are lending to sole traders etc. Our core product will be what has come before; good loans with strong security (usually meaning a property). However, there will be other good loans with different security. This does not make them bad deals, just different, and this represents a change which is, by human nature, always a cause of conflict. Everyone has a different perception of risk. I will say clearly IF YOU DO NOT LIKE THE RISK, DON'T TAKE IT. Some people will like it, some won't................................................................I stand by putting this deal on the website. It seems to me, Andrew, that your misjudgement here was to put something so radically different up on the site going into the Easter weekend when none of you were liikely to be able to explain to your loyal lenders what was going on. The worst of the rising hysteria and invective would probably have been avoided if you had accompainied the launch of said loan with some explanation of the reasoning that you gave in the post I reference here. Most probably still won't like the risk, such as myself, but as you say, they could just stay out of it. Maybe the main lesson here should be that when you next make a new experimental loan into something very different, you could be a little more mindful about communicating the reasons before people get themselves worked up into a lather. (Yes, I can be a real self-righteous little madam when I want to be ) I won't be participating as I've seen one too many businesses fail that have judged their viability on cash flow rather than profitability so I'll give this one a miss especially at 9%. I think though your summing up of the situation probably reflects how many feel about this loan. But each of course has to made their own decision as to how they feel about the risk as to whether to proceed or not. Not sure about the '....real self-righteous little madam....' but only you can be the judge of that!
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ramblin rose
Member of DD Central
“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Apr 23, 2014 16:23:07 GMT
Not sure about the '....real self-righteous little madam....' but only you can be the judge of that! I was a project manager for many (too many) years - it was part of the job spec!
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spockie
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Post by spockie on Apr 23, 2014 16:46:40 GMT
Perhaps I misunderstand how cashback works, but so long it is drawn down even if it's in May or June it's included in the cash back offer AIUI. My understanding is that the lender has to spend the money in April. It doesn't matter whether the money is spent on live loans or AM loan parts in April, but buying an AM part from an April loan in May won't count.
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merlin
Minor shareholder in Assetz and many other companies.
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Post by merlin on Apr 23, 2014 17:32:10 GMT
It seems to me, Andrew, that your misjudgement here was to put something so radically different up on the site going into the Easter weekend when none of you were liikely to be able to explain to your loyal lenders what was going on. The worst of the rising hysteria and invective would probably have been avoided if you had accompainied the launch of said loan with some explanation of the reasoning that you gave in the post I reference here. Most probably still won't like the risk, such as myself, but as you say, they could just stay out of it. Maybe the main lesson here should be that when you next make a new experimental loan into something very different, you could be a little more mindful about communicating the reasons before people get themselves worked up into a lather. (Yes, I can be a real self-righteous little madam when I want to be ) I won't be participating as I've seen one too many businesses fail that have judged their viability on cash flow rather than profitability so I'll give this one a miss especially at 9%. I think though your summing up of the situation probably reflects how many feel about this loan. But each of course has to made their own decision as to how they feel about the risk as to whether to proceed or not. Not sure about the '....real self-righteous little madam....' but only you can be the judge of that! Don't disagree with you but I have the phrase "Cash is King" indelibly burnt into my soul. I once worked for a European subsidiary of a very large US corporation. I and many of my colleagues were enjoying some very large bonuses for all the good work and profit we were bring in to our operation. Then one day we were summoned to the Head Honchos office and informed that we would not be getting our bonuses until we did something about recovering the huge mountain of outstanding receivables in order for the company to be able to pay the wages and some of our more angry creditors. We all thought this was Finances responsibility only to be told that the FD had been fired and it was now our job. I had just contracted to buy a new house and was in a typical chain and needed the bonus to meet my commitments. I won't go on, except to say it became a very stressful and unhappy experience that I would never wish to repeat. The company profit that year was a third over target, the Head Honcho got a promotion, I had to pay compensation for defaulting on a purchase contract and very nearly got a CCJ. Big learning experience, profit is nice but cash really is king.
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Post by oldnick on Apr 23, 2014 17:33:16 GMT
I've been tempted back into the fray given the appearance of a moderator and also some supportive comments by others. I will not hide away and have been very accessible to all of you over the last 12 months. The fact I go away over easter and was pretty much out of contact (albeit lurking) seems to have caused panic amongst some on the forum. Expecting an immediate answer on Easter Sunday is a little too much. As AC gets busier, I do find it harder to be constantly on here, but I do remain and I do continue to post. Andrew, I have the greatest respect for the ethos behind AC and for your continued presence on this forum. It isn't every business that allows access to the MD after all. Speaking for myself, any criticism I make is driven by a wish for AC to succeed, partly for selfish reasons, but also because I admire the company and want it to do well. I don't have the financial know how of some other contributors to this forum, but when I see a company I care about shooting itself in the foot metaphorically on the public relations side of things, I get exercised by it and can't help speaking out. You need your holidays, so don't launch things like this at the same time without thorough preparation of the PR. I recall a similar heated exchange that occurred over the Christmas break - mainly I think because of questions left hanging. We have nothing better to think about, luckily for you, and frustration mounts quickly. On the subject of interest rates acceptable to lenders, market forces will dictate whether they rise or fall. Setting the rate, rather than allowing an auction, has obvious attractions to lenders as we know where we stand and don't have to monitor things as much. The downside for you is that you become a lightening rod for the static generated by lender's (unreasonable?) expectations. In your career as a banker did you start out on the counter dealing with the barmy general public? This is only a little different, and I expect as the company's experience grows you will learn to get ahead of these PR issues rather than being surprised by them. Once again I'm sure I'm not alone in wishing you continued success for our mutual benefit.
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Post by bracknellboy on Apr 23, 2014 20:56:34 GMT
I would agree with Pikestaff that being mauled by crowd duedill will put off many In terms of 'toys out the pram' I suspect AH et al are being punished for being *too* accessible - they respond and interact 24/7 and the minute they take the bank holiday off and there's silence posts get more and more frantic. They may wish they took the FC approach where it's not even worth taking a pop at them. My sentiments and concern too. Also agree with samford subsequent post. Criticism - constructive or otherwise, but not execessively derogatory nor libelous - of platform/loan application etc. is part of the raison d'etre of the forum. But comments which target individuals who are professionals doing their job is in my view inappropriate. I also get a feeling of a growing 'sense of entitlement' to instantaneous responses on the forum. Each to their own, but not something I am comfortable with. none of which is to comment on the suitability of the loan itself.
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j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Apr 23, 2014 21:46:40 GMT
I would agree with Pikestaff that being mauled by crowd duedill will put off many In terms of 'toys out the pram' I suspect AH et al are being punished for being *too* accessible - they respond and interact 24/7 and the minute they take the bank holiday off and there's silence posts get more and more frantic. They may wish they took the FC approach where it's not even worth taking a pop at them. My sentiments and concern too. Also agree with samford subsequent post. Criticism - constructive or otherwise, but not execessively derogatory nor libelous - of platform/loan application etc. is part of the raison d'etre of the forum. But comments which target individuals who are professionals doing their job is in my view inappropriate. I also get a feeling of a growing 'sense of entitlement' to instantaneous responses on the forum. Each to their own, but not something I am comfortable with. none of which is to comment on the suitability of the loan itself. We probably have been spoilt by the fact that AC have been very accessible in their approach & may have to start accepting the fact that their time & availability will become more restricted as they grow further. On the flip side, I do hope they grasped a better understanding of the type of loans the majority of their lenders like too, though they do have the prerogative to list ones on occasions that may not appeal to the masses. A lesson learnt by both sides.
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mikes1531
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Post by mikes1531 on Apr 23, 2014 23:54:01 GMT
The underwriters and not the undertakers have just been called in... Now 56% full from 2%, a cool quarter of a mil. plus a little bit... In EDIT. I wonder how long it will take to unload on the AM? Hackney will look positively fleet-footed... To be clear I'm still intending to buy some of this when it does come on thou'. This is now a dead cert to drawdown and cashback. This is now no longer about Auction 87 I don't know exactly when it happened, but this a loan is now fully underwritten, though still only 3.5% funded by lenders. It's encouraging to see that U/Ws feel positive enough about this loan to put their money in -- although, of course, we'll never know what AC had to offer them to induce their participation. No doubt some lenders will put in bids on 30/Apr when they're looking for a last-minute place to invest so as to increase their cashback 'bonus', but I still suspect that much of this loan will be with the U/Ws when the auction ends, and that it could take a considerable time for the U/W's parts to be absorbed by the AM. Having said that, though, every time parts from one of the early 6.5% LtL loans shows up on the AM they do seem to disappear surprisingly -- to me, anyway -- quickly, so I expect there will be a steady trickle of buyers for Loan 87 parts. One caution I would make, however, is that there's no such thing as "a dead cert to drawdown". There may no longer be a question as to whether this loan will reach full funding, but it's still possible that... - the borrower changes their mind -- gets a better offer from another lender?
- or some condition of the loan cannot be met
- or some proposed covenant is not agreed by the borrower
- or something is revealed in the continuing duedil process that makes AC withdraw their offer of a loan
- or...
In short, I wouldn't recommend that anyone start counting their chickens just yet! PS. Looking at the list of bids for this auction, it appears that the last chunk of U/W commitment came at 1726 Wednesday.
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mikes1531
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Post by mikes1531 on Apr 24, 2014 13:50:25 GMT
The tangible is also being lost along the way. Stock is a tangible asset, it is there, it has a value and we have assessed the value of a distressed sale to be sufficient to recover the debt should it be needed. Stock carries a higher risk than having a solid property, and we have taken a much reduced value when assessing the stock. The debenture does give us step in rights where required, and is the "legal charge" that we use to take ownership of the stock of required. The PG in this case is unsupported and should be viewed as nil value, but also has some psychological value in keeping the chairman honest. Above, andrewholgate has tried to explain that stock is a tangible asset and the debenture would give AC the right to sell the stock to recover the debt. That's fine as long as the borrower continues to hold significant stock levels, but I've seen no suggestion that the borrower is required to do so. If a company is in financial difficulty and is close to being foreclosed upon, I'd expect them to do everything that they can to avoid losing the business, and that would include selling off as much stock as they can to bring more cash into the business. So there could be very little stock remaining as security for the AC loan by the time the administrators are called in. Furthermore, it seems to me that a lot of the disappointment with this loan opportunity -- and the accompanying lack of support from lenders -- can be traced to the following statement from AC in the summary of this auction... ... which says rather clearly that this loan does not have tangible security. I'm afraid that AC are being totally inconsistent about this loan... - The documentation of the loan states there is no tangible security but the PG should suffice; and
- In the quote above, AC's MD says the stock is sufficient tangible security to cover the loan and "The PG ... should be viewed as nil value."
I am not surprised in the least that lenders' support for this loan has been minimal.
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Post by andrewholgate on Apr 24, 2014 14:40:06 GMT
Wow. OK, well spotted.
I think there is a misunderstanding of the sentence in that the PG has no tangible security supporting it (ie a legal charge) but there is tangible security in the stock via the debenture. There should be a stock covenant in the loan, but I will double check that.
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koba
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Post by koba on Apr 24, 2014 16:39:01 GMT
Wow. OK, well spotted. I think there is a misunderstanding of the sentence in that the PG has no tangible security supporting it (ie a legal charge) but there is tangible security in the stock via the debenture. There should be a stock covenant in the loan, but I will double check that. I will defer to your superior experience in these matters but I personally question the value of a covenant of this sort vis a vis securing our investment. Don't get me wrong. Better to have the covenant than not. At the very least it might give early warning of problems. I simply question whether the borrower would rush to inform us of any breach (especially in extremis). I also question whether any reasonable amount could be recovered from the stock if the brand had ceased to exist. Try as I might I just cannot imagine myself saying "happy birthday darling, here is a handbag I picked up cheap from a geezer I know with a line of them. Company wot made them went out of business. Got a great deal!". Well, more exactly, cannot imagine myself saying such and living to tell the tale.
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j
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Penguins are very misunderstood!
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Post by j on Apr 24, 2014 17:01:12 GMT
Covenants aside, there are 2 issues for me. Firstly, the PG may carry a 'psychological' commitment on the part of the borrower, but it still has no legal binding whatsoever & if they decide not to honour it (not that we are doubting their commitment/honesty as such). Secondly, how can stock be truly monitored in a way that if trouble begins, AC can physically cease all of it before any is sold, thus negating our supposed protective asset?
I do not pretend to be wholly knowledgeable compared to AC personnel & would be happy to be educated but, I still cannot convince myself there is enough protection in this one if things go wrong & will stay out for the time being.
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