mikes1531
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Post by mikes1531 on Oct 9, 2014 19:15:23 GMT
If anyone wants to increase their exposure to this one they can have my share of the original loan. Got to feel a bit twitchy when a borrower comes back for more so soon. I expect there will be plenty of opportunity for anyone who wishes to increase their exposure to do so during the auction period or after drawdown. I wonder how much of the original £480k will be rolled forward into the new £780k loan? I can understand the twitchiness caused by this lender coming back so soon for more funding, but it does seem to be explained reasonably well in the Credit Report. I am also reminded that this isn't the first time this has happened at AC. The Green Deal Boiler Installer took out their Tranche 3 loan in January, and it hadn't even drawn down when they came back asking for the Tranche 4 loan. Tranche 4 was fully funded very quickly despite it being subordinate, security-wise, to Tranche 3.
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Post by Ton ⓉⓞⓃ on Oct 9, 2014 20:47:54 GMT
If anyone wants to increase their exposure to this one they can have my share of the original loan. Got to feel a bit twitchy when a borrower comes back for more so soon. I expect there will be plenty of opportunity for anyone who wishes to increase their exposure to do so during the auction period or after drawdown. I wonder how much of the original £480k will be rolled forward into the new £780k loan? I can understand the twitchiness caused by this lender coming back so soon for more funding, but it does seem to be explained reasonably well in the Credit Report. I am also reminded that this isn't the first time this has happened at AC. The Green Deal Boiler Installer took out their Tranche 3 loan in January, and it hadn't even drawn down when they came back asking for the Tranche 4 loan. Tranche 4 was fully funded very quickly despite it being subordinate, security-wise, to Tranche 3. I thought all tranches were equalized... Am I wrong as usual?
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j
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Post by j on Oct 9, 2014 20:59:23 GMT
I liked the older loan @ 11% better. The ltv is too high on this for me (all points about debentures & PGs, etc taken into account). 80% is too high for my taste even though I like the business as such & am invested in tranche 1, I won't be in a hurry to pick off AM for tranche 2. IMHO.
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Post by mrclondon on Oct 9, 2014 21:20:14 GMT
I thought all tranches were equalized... Am I wrong as usual? The norm seems to be (on both AC and TC) that if the borrower makes clear the requirement for future concurrent tranches at the time of the first one (e.g. the export trade loan split into 5 tranches) then the tranches will rank equally; whereas a later request (e.g boiler tranche 4) will rank behind the earlier tranche(s).
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mikes1531
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Post by mikes1531 on Oct 9, 2014 21:48:23 GMT
I thought all tranches were equalized... Am I wrong as usual? The norm seems to be (on both AC and TC) that if the borrower makes clear the requirement for future concurrent tranches at the time of the first one (e.g. the export trade loan split into 5 tranches) then the tranches will rank equally; whereas a later request (e.g boiler tranche 4) will rank behind the earlier tranche(s). That's the way I understand it, too. If at the time of the first tranche it is made clear that there will be more tranches later, and the amounts are specified, then it can be specified that the tranches would rank equally. But if the first tranche is funded on its own with no mention of further tranches -- as was the case with Green Deal Tranche 3 -- then it wouldn't be allowable to degrade the security of Tranche 3 by allowing Tranche 4 to rank equally after Tranche 3 was arranged.
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Post by cyrilmadrid on Oct 9, 2014 21:52:02 GMT
Strange to see that the credit score was hammered in just a couple of months. And a 6 months interest only period is introduced on the new loan. Maybe I will skip the new one and take my 11 % interest. In the CR they say that the report agency has changed their scoring method, asif to say it's meaningless, whereas perhaps the earlier much better one was meaningless. I'm reducing into tranche 2 It looks like the riskiest period is the first few months to a year... Invest after that time? I did read this change in the scoring method, but if 60 turns into 16, that's a pretty dramatic change ! Agree with you, it may be better to check that on month 7 they can repay principal and interest... PS : most people here seem to like loan 1 better than loan 2, so if that's the case, maybe this roll over doesn't take place, if loan 2 is not fully funded
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Post by Ton ⓉⓞⓃ on Oct 9, 2014 22:41:33 GMT
It's just that 12% is an attractive figure, I think it will fill, if not us then by u/wers. In a way AC security looks indestructible, totally fire resistant at the moment with the comment by AH saying, To clarify, none of the bridging loans are at risk of loss. The issue has been speed of refinance or sale of the properties. I'm not going to name the broker but we will not use them again. But I feel a little bit of caution is apposite, I take the above to be Bankerese (Banker+Chinese). |
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mikes1531
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Post by mikes1531 on Oct 9, 2014 23:29:18 GMT
It's just that 12% is an attractive figure, I think it will fill, if not us then by u/wers. In a way AC security looks indestructible, totally fire resistant at the moment with the comment by AH saying, To clarify, none of the bridging loans are at risk of loss. The issue has been speed of refinance or sale of the properties. I'm not going to name the broker but we will not use them again. But I feel a little bit of caution is apposite, I take the above to be Bankerese (Banker+Chinese). AH chooses his words carefully, and I note that the SCP&MSLT1&2 are not bridging loans. I expect Tranche 2 will not receive more than 50% of User bids via the auction, but will proceed with the help of underwriters. The underwriters' units will appear on the Aftermarket and be taken up gradually. If there still are some left when the principal repayments start in six months' time then I'd expect they'll start being bought at a faster rate.
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Post by Ton ⓉⓞⓃ on Oct 9, 2014 23:42:15 GMT
It's just that 12% is an attractive figure, I think it will fill, if not us then by u/wers. In a way AC security looks indestructible, totally fire resistant at the moment with the comment by AH saying, But I feel a little bit of caution is apposite, I take the above to be Bankerese (Banker+Chinese). AH chooses his words carefully, and I note that the SCP&MSLT1&2 are not bridging loans. I expect Tranche 2 will not receive more than 50% of User bids via the auction, but will proceed with the help of underwriters. The underwriters' units will appear on the Aftermarket and be taken up gradually. If there still are some left when the principal repayments start in six months' time then I'd expect they'll start being bought at a faster rate. I know you're right. It's as if AH came to the battlements and gave a war cry... and all gained heart (I mean all loans benefited from the confidence boost)
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Post by Ton ⓉⓞⓃ on Oct 10, 2014 0:18:55 GMT
<snip> On a related note, I can understand why there already would be pre-bids showing for this new loan. But how can there be User Bids placed already, inasmuch as the auction doesn't start until tomorrow? I can only think it lenders from T1, there are several rejections, maybe they're added by AC by request. At any rate they feel like Priority Bids in some way.
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mikes1531
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Post by mikes1531 on Oct 10, 2014 3:11:46 GMT
<snip> On a related note, I can understand why there already would be pre-bids showing for this new loan. But how can there be User Bids placed already, inasmuch as the auction doesn't start until tomorrow? I can only think it lenders from T1, there are several rejections, maybe they're added by AC by request. At any rate they feel like Priority Bids in some way. Perhaps they're the result of requests by lenders in T1 that want to transfer their investment into T2 but don't have shadow bidding privileges and by doing it this way they don't need to put up any cash at this time -- sort of like a manual shadow bid. If they placed a pre-bid, that would fail for lack of funds when the auction went live later today.
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mikes1531
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Post by mikes1531 on Oct 10, 2014 17:43:02 GMT
This T2 auction is off to a good start, with 16% spoken for on its first day. That should be encouraging for AC and the borrower.
On the other hand, I received a phone call this afternoon from AC to talk about this loan. I presume the purpose of the call was to encourage me (as a T1 investor) to sign up for T2. I referred the caller to my comments here and said I was sitting on the sidelines for now. But I was surprised by the call. Is this just a new AC tactic to encourage investors? Or are they worried that T2 might not get off the ground? Are they having trouble lining up underwriters for this loan?
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Post by Ton ⓉⓞⓃ on Oct 10, 2014 18:21:43 GMT
This T2 auction is off to a good start, with 16% spoken for on its first day. That should be encouraging for AC and the borrower. On the other hand, I received a phone call this afternoon from AC to talk about this loan. I presume the purpose of the call was to encourage me (as a T1 investor) to sign up for T2. I referred the caller to my comments here and said I was sitting on the sidelines for now. But I was surprised by the call. Is this just a new AC tactic to encourage investors? Or are they worried that T2 might not get off the ground? Are they having trouble lining up underwriters for this loan? AH did jokingly(?) speak of spies in 'State of the Wheels' speech. Previously he said everything on here is read. I take it all to be marketing, that is what does the customer want and how do we give it to them. In the same speech AH said there were only 6000 Lenders having sent out 5999 letters. But some Lenders have more weight and influence than others...
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mikes1531
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Post by mikes1531 on Oct 17, 2014 21:16:32 GMT
This T2 auction is off to a good start, with 16% spoken for on its first day. That should be encouraging for AC and the borrower. On the other hand, I received a phone call this afternoon from AC to talk about this loan. I presume the purpose of the call was to encourage me (as a T1 investor) to sign up for T2. I referred the caller to my comments here and said I was sitting on the sidelines for now. But I was surprised by the call. Is this just a new AC tactic to encourage investors? Or are they worried that T2 might not get off the ground? Are they having trouble lining up underwriters for this loan? A week has passed, and my opinion has changed radically. The T2 auction has made relatively little progress during the week. It's up to just 26% funded by user bids. If all of the existing T1 lenders had been willing to participate in the T2 loan, those users alone would have funded 62% of the T2 loan. So no more than 42% (=26/62) of the T1 lenders have indicated a desire to participate in the T2 loan. And to the extent that some of the T2 bids have come from investors who don't have a part of T1 that they're rolling into T2, the fraction of T1 investors willing to participate in T2 would be less than 42%, possibly considerably less. That strikes me as a rather telling indication that the T2 loan isn't felt to be a very good opportunity for investors. Does anyone have an alternative interpretation of this data?
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Post by badger on Oct 17, 2014 22:06:43 GMT
Does anyone have an alternative interpretation of this data?
That T1 lenders haven't notified AC of their intentions. They will wait until T2 draws down and T1 is repaid, then buy T2 on the AM. That's what I'm doing, less hassle and keeps my options open.
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