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 Sept 27, 2016 10:13:25 GMT
I agree it unlikely and I do not expect it to but if enough people do not want it, I doubt SS has a million or two sat around waiting to cover shortfalls, which is why they raise the funds before they launch the loans, so in this cashback would have to be offered pretty quick as the borrower already has the money. FS for example have quite rightly said when a loan renews if you want out you remain in until the loan is fully funded again. But FS don't already know how much demand there is for the new loan because they don't have pre-funding. The business models are different, and SS, whilst not having precise knowledge of the demand due to changing pre-fund levels, do broadly have the gist of it.
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ben
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Post by ben on Sept 27, 2016 10:27:01 GMT
I agree it unlikely and I do not expect it to but if enough people do not want it, I doubt SS has a million or two sat around waiting to cover shortfalls, which is why they raise the funds before they launch the loans, so in this cashback would have to be offered pretty quick as the borrower already has the money. FS for example have quite rightly said when a loan renews if you want out you remain in until the loan is fully funded again. But FS don't already know how much demand there is for the new loan because they don't have pre-funding. The business models are different, and SS, whilst not having precise knowledge of the demand due to changing pre-fund levels, do broadly have the gist of it. I be clear I do not expect it to be an issue. But the fact is if some one I worked with came up with this idea they would not work for me for long. The borrorower currently has about 6.5 million of lenders money they intend to repay about 1.3 million so leaving a shortfall of 5.2 million. SS have stated they will repay the current lenders when this loan launches. If you look at the loan it still does not have PP and it looks like it could take awhile, SS have given strange updates ie it be worth £75 million soon which it clearly is not. So a lot of investors could decide to take the money now and run and find a new home for it elsewhere. If this happens and they leave themselfs a few million short say for example prefunding only actually makes 3 million where does the other 2 million come from as the borrower already has the money SS will have to not transfer people money out as they will not have it. So it then leaves them the option of offering cashback or recalling the debt making it a defaul, both of which will take time and SS will be unable to do what they said and repay the lenders who want out. So to actually leave themselfs in that postion as a company is poor management.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Sept 27, 2016 10:29:34 GMT
But FS don't already know how much demand there is for the new loan because they don't have pre-funding. The business models are different, and SS, whilst not having precise knowledge of the demand due to changing pre-fund levels, do broadly have the gist of it. I be clear I do not expect it to be an issue. But the fact is if some one I worked with came up with this idea they would not work for me for long. The borrorower currently has about 6.5 million of lenders money they intend to repay about 1.3 million so leaving a shortfall of 5.2 million. SS have stated they will repay the current lenders when this loan launches. If you look at the loan it still does not have PP and it looks like it could take awhile, SS have given strange updates ie it be worth £75 million soon which it clearly is not. So a lot of investors could decide to take the money now and run and find a new home for it elsewhere. If this happens and they leave themselfs a few million short say for example prefunding only actually makes 3 million where does the other 2 million come from as the borrower already has the money SS will have to not transfer people money out as they will not have it. So it then leaves them the option of offering cashback or recalling the debt making it a defaul, both of which will take time and SS will be unable to do what they said and repay the lenders who want out. So to actually leave themselfs in that postion as a company is poor management. Underwriters?
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Post by meledor on Sept 27, 2016 10:30:42 GMT
I agree it unlikely and I do not expect it to but if enough people do not want it, I doubt SS has a million or two sat around waiting to cover shortfalls, which is why they raise the funds before they launch the loans, so in this cashback would have to be offered pretty quick as the borrower already has the money. FS for example have quite rightly said when a loan renews if you want out you remain in until the loan is fully funded again. But FS don't already know how much demand there is for the new loan because they don't have pre-funding. The business models are different, and SS, whilst not having precise knowledge of the demand due to changing pre-fund levels, do broadly have the gist of it.
I agree. I am going to have some of this loan and it is good that SS are giving existing investors an exit. SS can see demand from pre-funding and can sort any shortfall through underwriters so I don't see any real problem here.
Edit: ilmoro beat me to it.
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ben
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Post by ben on Sept 27, 2016 10:33:45 GMT
Short term underwritters will be pretty expensive, but granted they could do.
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Post by Deleted on Sept 27, 2016 10:36:01 GMT
I think there is a lot of baseless panicking and speculation on this thread. The net result of this new launch is actually a repayment, wouldn't be surprised to see no availability for this loan on the secondary market by the end of the day. I guess we will see whether the doomsters are right later on today.  |
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maxmarengo
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Post by maxmarengo on Sept 27, 2016 10:47:30 GMT
I think there is a lot of baseless panicking and speculation on this thread. The net result of this new launch is actually a repayment, wouldn't be surprised to see no availability for this loan on the secondary market by the end of the day. I guess we will see whether the doomsters are right later on today. I agree. People who don't like the original loans are already out (like me). Those who have been happy enough to hold on get a better deal with the new loan.
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Post by reeknralf on Sept 27, 2016 11:00:39 GMT
A few points for consideration; The council have said that their requirement is for 47 acres of rezoned land to be included in the new Local Plan. Local landowners have asked for 771 acres of land to be rezoned, 380 acres from this borrower. IMHO it is inconceivable that all of the land owned by this borrower will be rezoned. The council have said that the rezoning exercise is unlikely to take place until the summer of next year. Any discussion regarding rezoning / planning permission at this point is pure conjecture. If the new borrower is considering a loan based on the rezoning / planning aspect of this land, they will quickly find the facts regarding the local plan etc and may walk away from the deal. If the borrower is lending against grade 2 agricultural land, on a commercial mortgage basis, then IMHO, this could be a good deal for them. There are far too many unknowns for me and I will be avoiding this like the plague. I, by contrast, can't see any unknowns. We are lending £5.5M against a farm worth upwards of £7.5M. The planning is froth. This will continue to be my largest holding on SS.
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Post by GSV3MIaC on Sept 27, 2016 11:20:37 GMT
/mod hat off
Not sure I believe the old valuation, given the CAP gravy train derailment farm subsidy uncertainty after the Brexit vote (certainly seen some small signs of that impacting agricultural loans values), however at 60% LTV it looks reasonably safe, and is at least a bit of diversity vs student accommodation, or over priced London pads. As to whether SS have a couple of million quid in liquid funds, they damn well better have, because the PF is more than that. Can they use it as a float? Yeah, probably, given its discretionary nature. Will they have to? I rather doubt it.
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mikes1531
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Post by mikes1531 on Sept 27, 2016 11:43:28 GMT
I am reminded that even if almost nobody actually pre-funded the new loan we might not find out about the real situation because of SS's history of not releasing all the parts they're holding onto the SM as soon as they could. So even if they're left holding £4M of the new loan, we might only see £500k appear on the SM after the PF allocations are made. The rest would be drip-fed to the SM as and when the amount available gets low enough.
So if some of this loan does appear on the SM when it goes live, we'll have to keep watching the amount for those significant increases.
Having said that, though, the PF data does give SS advance notice of the demand they have, especially now that they seem to have adopted bottom-up for all loans. If the demand actually is low enough to be of concern to them, it wouldn't surprise me if the go-live is delayed -- just 'accidentally', of course.
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Post by Deleted on Sept 27, 2016 11:52:48 GMT
I think there is a lot of baseless panicking and speculation on this thread. The net result of this new launch is actually a repayment, wouldn't be surprised to see no availability for this loan on the secondary market by the end of the day. I guess we will see whether the doomsters are right later on today. I fail to understand all this argumentation. a) Forget the rezoning. The current loan (and the new loan as well) have no value associated to that potential future event. So, I am not even sure why it is discussed here. The loan is for agricultural land. If you like it, fund it. If not, let it out of your portfolio b) Even in case of rezoning, or partial rezoning, lenders do not get *anything at all* of the additional gain that the owner might make. Again, why is this becoming a central argument? Yes, this area looks nice for future potential developments, but this is not the reason you are lending (or not lending) now. c) With the 60% LTV, this is a pretty normal loan on the network. The risk factor does not seem at all higher than the average for SS. I think it will be filled with no problems, maybe in tranches as it happened normally last year. But liquidity seems to be pretty solid. So, continue enjoying your lending!
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Post by mrclondon on Sept 27, 2016 12:09:44 GMT
.... and that is why updates will not now pass on the ' word on the street' to investors which makes them much more accurate (very difficult, time consuming and still subject to delay, change and prevarication) but dull and very often without anything of substantive benefit. [...] Anything other than this degree of certainty is not acceptable to investors so the updates cannot have supposition or guesstimates any longer. I for one am very glad to hear this. Perhaps more importantly disseminating potentially misleading or inaccurate information is very unlikely to be acceptable to the FCA, and in the extreme it could be construed as mis-selling if for example SS are offering parts held by themselves in the loan. I doubt any lenders would wish to see SS closed down by the FCA for mis-selling. And to be entirely fair, the dissemination of potentially misleading or inaccurate information is not restricted to SS, most other platforms have examples of this (perhaps the most infamous is the AC Anglesey loan - "the refurbishments have been completed and have increased the valuation of the security." Ahem. With their current model, AC are particularly vulnerable to this issue when the QAA is selling loan parts.)
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Liz
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Post by Liz on Sept 27, 2016 15:11:00 GMT
I think there is a lot of baseless panicking and speculation on this thread. The net result of this new launch is actually a repayment, wouldn't be surprised to see no availability for this loan on the secondary market by the end of the day. I guess we will see whether the doomsters are right later on today. I agree. THis new loan is actually smaller than the last for, so it is actually taking money of the platform, plus those who will now invest in a 90 day loan, but didn't like the negative loans at a higher LTV, will create more demand than supply. We may so some on the SM initially, because a lot of investors may not realise the old loans are repaying, but this will all be long gone 24 hours later. SS do also have the ability to short term fund any short term shortfall, so not an issue, just look how easily DFL6 was repaid to MT despite the "doomsdayers"
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ptr120
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Post by ptr120 on Sept 27, 2016 15:31:43 GMT
loan now live and just under 310k available on the SM
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Post by GSV3MIaC on Sept 27, 2016 15:37:01 GMT
Just under £200k!! I wonder if SS have some more to trickle out later??
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