Well here you go then as it doesn't seem to have been posted anywhere else (no doubt someone will instantly point out that it has
) - it was in the General Update email.
"It's always great when a plan finally comes together. And that was the case this week when one of our bigger and more lengthy loan projects, TGH, S******, - or
PBL040 for those of you who like their secret code numbers - was repaid.
The ‘unknown unknowns’
It's also a great example of the vagaries of property investment, and despite all the known knowns and the known unknowns, it’s the 'unknown unknowns', as U.S. secretary of defence Donald Rumsfeld once described them, that tend to be the difficult ones. Such was the case with PBL040.
Grand things come to those who wait
TGH is a prominent five-storey 32-bedroom landmark property. This week all investors in the loan had their capital credited to their accounts. And the big lesson from it is, grand things do tend to come to those who wait, to paraphrase the famous saying.
What follows describes the journey that led to the full repayment of the loan.
Our involvement started life back in June 2015, when we negotiated a £773,500 1st charge bridging loan against a security of £1,300,000, with a 60% LTV. The original loan term was six months. Looks simple? Well, no. In the world of bridging loans, complexity is often the norm.
Brexit blues
The original loan was due to be repaid in January 2016, with refinancing lined up with a mainstream lender. However, legal negotiations proved lengthy, and in April 2016 the lender pulled out. After we had arranged an extension to enable the borrower time to find another solution, a new lender was identified in early June 2016, with an instruction to work with us on the refinance arrangements.
But after the EU referendum on June 23 2016, the new lender pulled out. Lendy demanded a £25k cash payment from the borrower to clear their outstanding debt, and an ongoing weekly interest charge, while we worked with the borrower to find another new lender, and buyer.
In the autumn of 2016 a new refinance deal was agreed with a new lender, however after a number of issues arising, negotiations continued until December, when we instructed a receiver, after losing confidence in the borrower.
New buyer and lender secured
In early January 2017, we then decided to instruct agents to control the asset and supervise the sale process to ensure any undue delay was avoided. At the end of the month, a new buyer was found, and a new lender looked likely to be secured by February.
Negotiations continued and in early March 2017 we demanded a part repayment, which was repaid to investors. The borrower continued to pay monthly interest. By late March, we started our due diligence process with our legal firm appointed, but legal title proved both complicated and convoluted.
Patience pays
But towards the end of April 2017, with our due diligence close to conclusion, a May completion looked highly likely. And on this occasion, after a painful two years, we got it over the line on May 3 2017, the loan was repaid in full, and investors’ capital was credited to accounts, with almost £200k in interest paid over the term.
As we’ve shown, delays can happen, and are a routine part of the process, caused by any number of other minor issues, known and unknown. But it does often pay to be patient.
Perception v reality
After we’ve done the number crunching,
we’ll publish the stats on all of our repaid loans in a future update, with a breakdown of actual extensions, late payments, defaults and repayments, to enable you to invest in the knowledge that the actual picture is better than the perception. Finally, you’ll find a list of the new loans coming down the pipe over the next week or so.
And that’s it. From all of us here, have a great weekend.
Paul
Head of Marketing and Communications"
The pipeline loans update followed which presumably has already been posted? and a general discussion of the update is
here.
) - it was in the General Update email.
