Another lender in trouble? Paragon BTL

dunstonh

A lot of lenders, packagers, networks, brokers and others linked to mortgages havent been round long and it isnt really a mature market.

You are likely to see an increase in mergers, consolidation and firms going under.

It isnt necessarily a bad thing in the long run. You need to get rid of the weak periodically and its best the failing business models fail early on and not later when they are much bigger.

With lots of lenders likely to want to raise capital at various points in the future, the fact B&B got rid of 8% now is a good thing. They increase their cash and reduce their risk and can get on lending to new people under a tighter criteria with less risk involved.

Dan_Collins_2

Next year will be the year of the balance sheet lender. Nationwide are already topping the table and decreasing fixed rates. They can only go so far though but they will be the type of lender to remain strong after the spring of next year.

I agree Dunstonh, poor companies will go under. Companies that can branch out in to other areas and with good client banks will be ok. We are lucky, still busy and with a few new areas to go in to. We are finding that sub-prime brokers are very negative at the mo!

dunstonh

I just read that almost half the book B&B sold was housing association. No wonder the markets liked that.

mystic_trev

As well as issuing bonds backed by mortgages, Paragon has a £2.3bn warehouse facility of which £932m had been drawn at the end of September. Paragon can draw on this up to the total of £2.3bn until the end of February. It also has a £280m corporate facility which is due for repayment at the end of February.

http://www.ft.com/cms/s/0/9f087a44-974c-11dc-9e08-0000779fd2ac.html

I assume this means, if they can't secure any more funds by February they're in the !!!!!!?

poppy10_2

Down a further 36% today. Share price has tumbled from 260p to 80p in just 2 days. That's gotta hurt

They were hoping to secure additional funding by going for a share issue, but with their share price in the toilet, that's not going to net them very much.

MiserlyMartin

Another lender is down and out and another nail in the coffin for Buy To Let. Better rename it Paragone. I think next years property TV will be very different, with programmes on how not to do Buy To Let and how not to lose money on property.

mystic_trev

poppy10 wrote: »

Down a further 36% today. Share price has tumbled from 260p to 80p in just 2 days. That's gotta hurt

They were hoping to secure additional funding by going for a share issue, but with their share price in the toilet, that's not going to net them very much.

Lost 80% of their value in the last three months!