cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Sept 19, 2016 12:48:09 GMT
THIS LOAN IS LIVE
| Loan Amount (First Tranche) | : | £ | 4,166,129
| | Security GDV | : | £ | 16,814,500*
| | SS Indicated LTGV | : |
| 25%* | | Current Value (19/09/2016) | : | £ | 6,229,500*
| | Current LTV (19/09/2016) | : |
| 67%* | | 90-Day Market Value | : | £ | 5,092,375*
| 90-Day LTV
| : |
| 82%* | | Term | : |
| 365 days
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* There are unilateral notices (UNs) in place amounting to £1.34m which protects the individual unit purchasers' purchase contracts (and ultimately, the sums paid pursuant to those contracts) which have been registered (or are in the course of being registered) on the Land Registry title in advance of the SS legal charge. See the overview below for more information.
PLEASE NOTE : This post (and all my DD posts) are no longer being updated by myself (besides the basic loan status)
Loan Information & Observations
Borrower - M****** (Cardiff) Ltd
- The above company was established March 2015 and has no parent company
- S****** P*** D** is the sole director and 100% shareholder. He has a large portfolio of businesses he is attached to, with 62+ appointments on CH, the vast majority being in the property sector. He also owns a League One Football Club
- He is also connected to several student accommodation projects currently on MT; in fact, the security in this loan was used for a current MoneyThing loan (due to repay as a consequence of this loan)
Loan
- This loan is connected to PBL085, DFL003 & PBL135 (same director). All these loans are Student Accommodation Developments, and the actual borrowers are separate SPVs. As well as first legal charges over each property within the group, SS will have a debenture from each Company and also a cross guarantee between all 3 Companies so that all security is cross collateralised.
- As a DFL this loan will be used to aid in the development of the accommodation block
- The first tranche (£4.166m) is to refinance the lending currently in place with another funder (With MT) which was used to fund the land purchase and initial development set up costs.
- Build programme will be completed over an 11 month period with monthly drawdowns of development funding made upon receipt of IMS update reports confirming works completed.
- Funding will remain within 70% of the Gross Development Value for the development of £16.8m*.
Security
- Development site with planning permission for student accommodation. The proposed scheme comprises of 6 detached 3 storey buildings (Blocks A - F) providing a total of 249 self-contained studio rooms.
- Planning Permission has been granted
- Comparisons between the MT valuation report and the SS valuation report (courtesy of ilmoro )
- GDV for SS £1m (£15.2m v £16.3m) higher because based on actual sales data, and not predictions. The latest phase is realising higher prices due to demand (+£5k per unit).
- GR has increased from £250 to £300 per unit & 4% yield (3.5% in MT) which results in an extra 600k
- MT 9m build cost + 500k S106 contribution, SS £7.5m, no S106. MT 20% developer profit, SS 15% profit
- Strangely, the 2 valuation reports give different sizes for build; 1.28ha (MT) vs 1.5ha (SS)
[/ul]
- The Market Value/ 90-Day Market Value & Gross Development Value indicated by SS (and on this overview) may seem to contradict what the Valuation Report shows. The reason for this is because of the following;
- SS have used the VR Gross Development Value (£16,285,000) + Freehold interest ground rents (£1,867,500) to indicate what they perceive to be the GDV = £18,152,500
- There are unilateral notices (UNs) in place which protects people that have provided deposits (85 units already exchanged) and amounts to £1,340,000. These take priority over our first charge and effects the GDV, LTV & 90-day LTV :
[/td][td] [/td][td style="text-align:right;padding:3px;"]Indicated Value In VR[/td][td style="text-align:right;padding:3px;"]Unilateral Notices[/td][td style="text-align:right;"]Actual Value (19/09/16)[/td][/tr][tr][td style="padding:3px;"]Market Value[/td][td]£[/td][td style="padding:3px;"] 7,567,500[/td][td style="padding:3px;"] 1,340,000[/td][td] 6,227,000[/td][/tr][tr][td]90-day Market Value[/td][td]£[/td][td style="text-align:right;"]6,432,375 [/td][td style="text-align:right;"]1,340,000 [/td][td style="text-align:right;"]5,092,375 [/td][/tr][tr][td style="padding:3px;"]Gross Development Value [/td][td]£[/td][td style="text-align:right;padding:3px;"]18,152,500 [/td][td style="text-align:right;padding:3px;"]1,340,000 [/td][td style="text-align:right;"]16,812,500[/td][/tr][/tbody][/table][/ul][/ul][/div][/font]
Exit Strategy- Exit will be made from the sale of units. In addition to the 85 units already exchanged there are also a further 30 units with reservations fees taken. These units are all within the planned Phase 1 so there are only 38 units in Phase 1 left to be sold. Phase 2 units will not be released until the remaining units in Phase 1 have all been sold and works on site are well advanced on Phase 1.
- PBL085 (Huddersfield Block C) should be completed and fully sold early in 2017 and there is a profit in excess of £4.5m, which will be reinvested within the group to reduce the overall borrowing requirement.
| Code Number Assigned | : | 19/09/2016 | | Loan went live @ | : | 20/09/2016 | | Allocation | : | £13,000 | | Amount of Investors @ Live | : | 1967 |
If you require any citation for the above information please PM me  . Any observations you have please be sure to post it in this thread and I will try to add it to this overview.
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markdirac
Member of DD Central
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Post by markdirac on Sept 19, 2016 15:51:47 GMT
So the realistic value of the security today will be say £5.1M, resulting in an LTV of 80%+. As the development commences I guess the value will dip briefly, because of the cost of reinstating the land should the project fail.
Would anyone care please to take a guess at what the value might dip to, and roughly how far into the project?
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Liz
Member of DD Central
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Post by Liz on Sept 19, 2016 15:56:30 GMT
So the realistic value of the security today will be say £5.1M, resulting in an LTV of 80%+. As the development commences I guess the value will dip briefly, because of the cost of reinstating the land should the project fail. Would anyone care please to take a guess at what the value might dip to, and roughly how far into the project? Impossible to say! Ask 100 experts and you will likely get 100 different answers.
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Post by savingstream on Sept 19, 2016 16:13:10 GMT
So the realistic value of the security today will be say £5.1M, resulting in an LTV of 80%+. As the development commences I guess the value will dip briefly, because of the cost of reinstating the land should the project fail. Would anyone care please to take a guess at what the value might dip to, and roughly how far into the project? No the realistic value of the security is £6.229m. If it was sold in a distressed state within 3 months, then £5.09m.
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markdirac
Member of DD Central
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Post by markdirac on Sept 19, 2016 16:30:30 GMT
So the realistic value of the security (based upon its condition today if we thought we wanted to sell it within about three months) will be say £5.1M, resulting in an LTV of 80%+. As the development commences I guess the value will dip briefly, because of the cost of reinstating the land should the project fail.
Would anyone care please to take a guess at what the value might dip to, and roughly when?
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cooling_dude
Bye Bye's for the PPI
Posts: 2,853
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Post by cooling_dude on Sept 19, 2016 16:39:38 GMT
So the realistic value of the security (based upon its condition today if we thought we wanted to sell it within about three months) will be say £5.1M, resulting in an LTV of 80%+. As the development commences I guess the value will dip briefly, because of the cost of reinstating the land should the project fail. Would anyone care please to take a guess at what the value might dip to, and roughly when? It is very hard to tell, but my opinion is that because this is simply a plot land I'm guessing that you're going to be adding value to it as soon as the developer starts to place the foundations... 80% worst case scenario is not a bad looking loan; some scope for error. In any case, you shouldn't use 90 day MV as the 'realistic value of the security', just a bad case scenario. I guess that these DFLs are a bit like marmite; some love them, some hate them. I like marmite...
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Post by meledor on Sept 19, 2016 16:41:31 GMT
So the realistic value of the security (based upon its condition today if we thought we wanted to sell it within about three months) will be say £5.1M, resulting in an LTV of 80%+. As the development commences I guess the value will dip briefly, because of the cost of reinstating the land should the project fail. Would anyone care please to take a guess at what the value might dip to, and roughly when? Why do you say that the realistic value is £5.1m? In other words why are you using the 90 day market value? What is so special about 90 days and where do you stop - wouldn't it be more "realistic" if we had a (much reduced) value for a sale within 7 days?
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goopy
Member of DD Central
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Post by goopy on Sept 19, 2016 16:54:17 GMT
So the realistic value of the security (based upon its condition today if we thought we wanted to sell it within about three months) will be say £5.1M, resulting in an LTV of 80%+. As the development commences I guess the value will dip briefly, because of the cost of reinstating the land should the project fail. Would anyone care please to take a guess at what the value might dip to, and roughly when? Why do you say that the realistic value is £5.1m? In other words why are you using the 90 day market value? What is so special about 90 days and where do you stop - wouldn't it be more "realistic" if we had a (much reduced) value for a sale within 7 days? I think you missed a bit..... So the realistic value of the security (based upon its condition today if we thought we wanted to sell it within about three months) will be say £5.1M
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Post by meledor on Sept 19, 2016 17:02:39 GMT
Why do you say that the realistic value is £5.1m? In other words why are you using the 90 day market value? What is so special about 90 days and where do you stop - wouldn't it be more "realistic" if we had a (much reduced) value for a sale within 7 days? I think you missed a bit..... So the realistic value of the security (based upon its condition today if we thought we wanted to sell it within about three months) will be say £5.1M Not at all. Please read my post again. "In other words why are you using the 90 day market value?"
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sam i am
Member of DD Central
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Post by sam i am on Sept 19, 2016 17:19:13 GMT
As I commented on the pipeline thread, I believe the presence of the UNs gives this loan the characteristics of a 73% LTV second charge loan rather than a 67% first charge loan. See my post here: p2pindependentforum.com/post/139716
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cooling_dude
Bye Bye's for the PPI
Posts: 2,853
Likes: 4,298
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Post by cooling_dude on Sept 19, 2016 17:30:13 GMT
As I commented on the pipeline thread, I believe the presence of the UNs gives this loan the characteristics of a 73% LTV second charge loan rather than a 67% first charge loan. See my post here: p2pindependentforum.com/post/139716I do agree that this looks to be a second charge. The UNs are registered on the land registry ahead of any new charge, so it's hard to see how SS can claim to have first charge. I'm not sure how you have gotten to 73% LTV? I make the market value £6,227,000 (after deducting UNs); so the current LTV is 67%?
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markdirac
Member of DD Central
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Post by markdirac on Sept 19, 2016 17:35:51 GMT
... why are you using the 90 day market value? What is so special about 90 days and where do you stop - wouldn't it be more "realistic" if we had a (much reduced) value for a sale within 7 days? 'cos we are given values, by the valuer, for (a) 90 days and (b) "whenever". I reckon that SS would want to sell the security sooner than "whenever", and indeed this is what is happening with the garden centre. I guess that valuers typically offer a 90-day value because that is typically a pragmatic time for selling a property if one wants to get on with it.
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Post by meledor on Sept 19, 2016 18:19:33 GMT
... why are you using the 90 day market value? What is so special about 90 days and where do you stop - wouldn't it be more "realistic" if we had a (much reduced) value for a sale within 7 days? 'cos we are given values, by the valuer, for (a) 90 days and (b) "whenever". I reckon that SS would want to sell the security sooner than "whenever", and indeed this is what is happening with the garden centre. I guess that valuers typically offer a 90-day value because that is typically a pragmatic time for selling a property if one wants to get on with it. I was interested in your applying "realistic" to the 90 day value. Of course you can use whatever value you like in your assessment of the loan, but the subtext to saying one is realistic is surely that other valuations are unrealistic. I note that what you call realistic SS calls distressed. On that basis presumably you are bringing into your meaning of "realistic" some assumptions about a fairly widespread and imminent decline in property prices?
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markdirac
Member of DD Central
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Post by markdirac on Sept 19, 2016 18:36:08 GMT
'cos we are given values, by the valuer, for (a) 90 days and (b) "whenever". I reckon that SS would want to sell the security sooner than "whenever", and indeed this is what is happening with the garden centre. I guess that valuers typically offer a 90-day value because that is typically a pragmatic time for selling a property if one wants to get on with it. I was interested in your applying "realistic" to the 90 day value. Of course you can use whatever value you like in your assessment of the loan, but the subtext to saying one is realistic is surely that other valuations are unrealistic. I note that what you call realistic SS calls distressed. On that basis presumably you are bringing into your meaning of "realistic" some assumptions about a fairly widespread and imminent decline in property prices? No, I was not thinking of imminent issues. I always tend to think of "whenever" valuations as not realistic, because of the nature of P2P agencies having lenders snapping at their heels. If one is selling a property oneself, then I reckon the "whenever" valuation is useful to aim for. And if a P2P agency is expediting a sale, then they can use the "whenever" valuation in negotiation. But I would never expect that value to be achieved. It is distracting (for me) that the P2P agencies all use the "whenever" value in their calculations.
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jjc
Member of DD Central
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Post by jjc on Sept 19, 2016 19:05:55 GMT
As I commented on the pipeline thread, I believe the presence of the UNs gives this loan the characteristics of a 73% LTV second charge loan rather than a 67% first charge loan. See my post here: p2pindependentforum.com/post/139716I would like to understand these UN's better. For instance, as more deposits are made on units exchanged do they too jump to the queue ahead of us?
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. Any observations you have please be sure to post it in this thread and I will try to add it to this overview.
