SIMPLE SUMS - OCTOBER LOAN BOOK

SIMPLE SUMS - OCTOBER LOAN BOOK

During October 2011 the Loan Book was repaid a total of £13.2m before forex correction, with £12.7m of this sum coming from repayments due this year – a good result that reduced Loan Book debt by £12.9m after taking foreign exchange into account.

This brings the total gross value of monies repaid by 31st October to £303.25m, or a net value of £301.05m after allowing for write-offs, set-offs, and forex. The net value is just shy of 72.5% of the initial given value of £416,000,000, which after applying the foregoing corrections, brings the effective value of the Loan Book to £413.8m - leaving some 27.2% still to be repaid. Of that outstanding amount, £38.26m remains due for repayment before the end of 2011 (based on the original repayment schedule - see note below) with £46.96m now due in 2012, a further £19.70m due in 2013, and finally, £7.82m in 2014. All sums relate to the hopeful (and much desired) 100% return.

The JLs state in their October report that four loans were fully repaid during the month and five in part; I don’t quite understand the ‘in part’ description, as any payment – no matter how small – could be considered ‘in part’ and nine repayments from 57 borrowers appears rather low.

The sum of £38.3m to be repaid before the end of 2011 is a lot to expect, but then the value of the single highest loan of more than £10m could be as much as £30m. This is a feasible assessment given the tier-values ascribed to KSFIoM mortgagors in earlier JL reports, it also ties-in with tier values versus number of borrowers per tier; the total sum owed to the Loan Book; the total number of borrowers; and the range of previously assumed average loan-values per tier. The number of possibile outcomes shrink as these variables reduce in number thereby increasing the existence of a single high value loan. If this loan (of any substantial value!) were to be repaid before 31st December, it would be a great step forward – not least because the remaining total debt would then be spread between the 52 entities then left owing money.

Note: My calculations start from August 2009 when the JLs first listed the loan values to be repaid and their due dates. Since then the goal posts haved moved continuously as the JLs reassess the value of outstanding loans and their revised due dates. Some mortgagors have repaid their loans early whilst others have deferred their debts into the future; to see where we are today we have to know where we came from and see how the JL's initial prediction compares with today's position. From the table below we derive that £38.3m is due by the year’s end; £47m has so far been repaid early from 2012 with £19.7m in from 2013 and £7.8m from 2014. Zero returns are predicted for 2015, whilst loans from 2016 have already been repaid. In conclusion, £74.5m has been repaid early from loans that were originally due repayment in future years, whilst £38.3m (which likely includes roll-over from 2009/2010) is pending repayment over the next five weeks. Only the JLs have a notion as to how much of that money will return to us this year or will roll-over into 2012, but I don't expect we will get to know much before early January.

          As at 31/10.2011     Predicted Aug 2009

2011 £101,351,877 / £139,612,008
2012 £60,837,926 / £107,800,551
2013 £10,060,014 / £29,767,596
2014 £1,891,492 / £9,708,823
2015 £0 / £0
2016 £11,530,166 / £11,530,166
TOTAL £303,252,331 / £416,000,000

Note: The calculations given above are based on figures posted by the JLs in an number of reports going back over the years; the results are believed to be accurate, but as always, don't act upon them without first seeking professional advice.

Rgds,
Ice