DFL019 - Phase 1, Land at R***** Leisure Village - SUSPENDED

Hopefully should lead to a greater liquidity of the prior tranches as the risk of future underfunding is reducing

Loan suspended. The money has run out. 

It seems that this will be an even bigger mess than Wolverhampton to sort out. At least with that there is the prospect of selling all the flats individually if we have to.

The last set of pictures here were basically a few glorified huts in a field, that made Centre Parcs look like a 7-star resort.

Genuinely fear this could become a white elephant.

"Trading in this loan on the secondary market was suspended on 17 October 2018, because Lendy became aware, at that time, that an offer of finance has been made to the borrower to assist with the completion of the development, which if progressed would result in Lendy’s loan effectively being capped at the drawn amount, with no more funds to be advanced via Lendy to assist with the development. A third party has offered a loan facility of up to £10m to the borrower, to assist with the completion of phase one of the development, but the funder requires a first legal charge over the property, to rank ahead of Lendy’s investors. This offer is being considered. Investors should note that, no interest will now be payable to investors in this loan on a monthly basis and that the next interest payment run will only include interest on this loan up to and including 5 November 2018. Interest will continue to accrue and will be paid to investors, if the loan (DFL019) is fully and satisfactorily repaid, in due course"

Surely since the interest is paid upfront, Lendy should still pay the investors interest up until the loan term? This is a big blow to me personally because I have a substantial proportion of my whole Lendy portfolio in this loan and not being paid interest on account is altering the goalposts as far as I'm concerned. 

Ah, but we didn’t respond to Lendy’s repeated requests to fill new tranches in a timely manner, so we’ve only ourselves to blame 😉

The odd thing is, I don’t recall ever being asked whether we had the collective appetite to fund £20m-odd to a single development.

Well if this happens and lenders are relegated to a second charge with no capital returned, then that stinks in my book.

Fairly unacceptable I would agree, if the potential new investor believes it is a viable proposition then they should accept equal ranking. If not, plainly they are simply using us as a cushion against shortfall.

Just because the third party funder wants first legal charge doesn't mean the valuation is wrong, but my initial thought when I read this update was why no vote? I would never have put money into this if it was a second charge loan. This is the exact scenario why the voting system was brought in for. And as I stated previously, I can't see how Lendy can stop paying us monthly interest up until the loan term date, it is in their own T&C's that interest is paid on account up until the loan term date. This should not be allowed to be changed on a live loan.