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HCPC Valuations:
Developed some quick valuations based on Assets (real estate loans funded by selling the convertible preferred shares) and the potential Earnings, assuming the credit market improves and they are able to pool their loans and sell the BCLOC securities to institutional investors and so free up their capital to close more loans. Also we have to factor in the preferred shares which need to be converted into HCPC common shares within 12 months of purchase. The price that these are converted at is critical. How the share price increases in value before that conversion is something we are all interested in.
I will offer some caveats. I may be wrong in some of my assumptions and I am putting this on the board for discussion.......there are two scenarios here, the second one (Scenario B) involves a reverse split. If you are closed to this possibility then best to leave now:) However, if you do read further, it may spark discussion and some may actually see the merits of it......imo of course.
Scenario A: Without an RS
Current OS c. 7.5 billion
Insiders 2.0 billion
3rd Party (future merger partner (s)?) 3.5 billion
General shareholders 2 billion
Ok, look at Assets but excluding earnings for now (Total real estate funded by sale of preferred shares):
$700 million divided by 7.5 billion OS = c. $0.093 share = Market Cap of $700 million (Realistic/ fair market valuation?)
Now earnings:
So with assets of $700 million, the potential Earnings on these are :
Earnings on $700 million, assuming they could pool and sell the BCLOC securities when the markets improve:
= $30 million (based on 4% fee) divided by 7.50 billion shares OS = $0.004 share.
If take PE 5 (conservative) = $0.02 share (based on 7.50 billion OS) = Market cap of $150 million (5 times earnings)
If take PE 10 = $0.04 share (based on 7.50 billion OS) = Market Cap of $300 million (10 times earnings)
i.e. Market Cap supported by Assets + Market Cap supported by Earnings:
$700 million + $150 million (based on PE 5) = $850 million Market Cap
$700 million + $300 million (based on PE 10) = $1 billion Market Cap
So if OS = 7.5 billion
$850 million Market Cap = $0.11 share
$1 billion Market Cap = $0.13 share
However, this is before the preferred shares are converted.
At a price of $0.10 this would mean that upon conversion of $700 million worth of preferred shares, there would be:
$700 million divided by $0.10 share = 7 billion extra common shares
In effect, the OS shares would be increased to c.15 billion shares.
So if OS = 15 billion shares
$850 million Market Cap = $0.056 share
$1 billion Market Cap = $0.065 share
This is not enough to uplist to OTCQX, where the minimum bid size is 25c. They would either have to reduce the share numbers through a major buyback and/ or develop the business to a much greater size……market cap approximately 4 times bigger…..c. $3.5 to 4 billion worth of business rather than $1 billion. That also raises the question of where the additional capital would come from and how would the HCPC fund it? Extra preferred shares? Or merger with a company that can bring that kind of money to the table??
Another option that some may not like involves a reverse split. If this enables the company to uplist quicker onto OTCQX, should we be against it…..if the developing fundamentals support the price?? I put this option up for discussion, keep an open mind and lets explore ideas rather than burn me at the stake straight away…..can do that later on…:)
Scenario B: With a 10:1 Reverse split
Current OS say 7.5 billion
Insiders 2.0 billion
3rd Party (future merger partner (s)?) 3.5 billion
General shareholders 2 billion
Then say RS 1:10
OS 750 million
Insiders 200 million
3rd Party (future merger partner (s)?) 350 million
General Shareholders 200 million
Insider Ownership % (including 3rd party) remains unchanged at c.75%.
Rather than looking at assets first, I've looked at potential earnings first here as I wanted to look at the share price/ market share price that could be supported by them, before factoring is assets and the possible conversion price for preferred shares
So with assets of $700 million, the potential Earnings on these are :
Earnings on $700 million, assuming they could pool and sell the BCLOC securities when the markets improve:
= $30 million (based on 4% fee) divided by 750 million shares OS = 4 cents share.
If take PE 5 (conservative) = 20c share (based on 750 million OS) = Market cap of $150 million (5 times earnings)
If take PE 10 = 40c share (based on 750 million OS) = Market Cap of $300 million (10 times earnings)
However:
We also have to factor in the future preferred share conversion. Now there are two ways that I could approach this. I could first factor in assets ($700 million) and see what effect that has on share price before working out the preferred share conversion to common shares (best case scenario) or I could base the conversion on the share price supported by potential earnings only on $750 million worth of loans/ assets (worst case scenario)…..I’ve taken the worst case scenario first:
Worst Case Scenario
If the $700 million is assets was paid for by the preferred shares, the conversion would be to $700 million worth of common shares.
- If HCPC price was at 20c share (PE 5) that would equate to 3.5 billion additional shares.
- If HCPC price was at 40c share (PE 10) that would equate to 1.75 billion shares
Total Number of OS shares could be between 4.25 billion and 2.5 billion shares after conversion of preferred shares (and taking into account the 10:1 Reverse Split):
For a market cap of $150 million based on OS of 2.5 billion = $0.06 share (before factoring in assets)
For a market cap of $150 million based on an OS of 4.25 billion = $0.035 share (before factoring in assets)
For a market cap of $300 million based on an OS of 2.5 billion = $0.12 share (before factoring in assets)
For a market cap of $300 million based on an OS of 4.25 billion = $0.07 share (before factoring in assets)
Now valuation of Assets, but excluding earnings for now (i.e.Total real estate funded by sale of preferred shares):
$700 million divided by 2.5 billion OS = c. $0.28 share = Market Cap of $700 million (Realistic/ fair market valuation?)
$700 million divided by 4.25 billion OS = c. $0.16 share = Market Cap of $700 million (Is this realistic/ fair market valuation?)
If add in the Market Cap which could be supported by Earnings as mentioned above:
i.e. Market Cap supported by Assets + Market Cap supported by Earnings:
$700 million + $150 million (based on PE 5) = $850 million Market Cap
$700 million + $300 million (based on PE 10) = $1 billion Market Cap
So if OS = 2.5 billion
$850 million Market Cap = $0.34 share
$1 billion Market Cap = $0.40 share
If OS = 4.25 billion
$850 million Market Cap = $0.20 share
$1 billion Market Cap = $0.235 share
This remember, is all based on an 10:1 RS and after Preferred Shares are converted.
In both cases, the share price gets very close to or above the 25c threshold for OTCQX Prime tier.
Ok that was the worst case scenario, with the conversion of preferred shares based on the share price that could be achievable/ supported by earnings on the overall assets/loans only.
Best Case Scenario
Current OS say 7.5 billion
Insiders 2.0 billion
3rd Party (future merger partner (s)?) 3.5 billion
General shareholders 2 billion
Then say RS 1:10
OS 750 million
Insiders 200 million
3rd Party (future merger partner (s)?) 350 million
General Shareholders 200 million
Insider Ownership % (including 3rd party) remains unchanged at c.75%.
So with assets of $700 million, the potential Earnings on these are :
Earnings on $700 million, assuming they could pool and sell the BCLOC securities when the markets improve:
= $30 million (based on 4% fee) divided by 750 million shares OS = 4 cents share.
If take PE 5 (conservative) = 20c share (based on 750 million OS) = Market cap of $150 million (5 times earnings)
If take PE 10 = 40c share (based on 750 million OS) = Market Cap of $300 million (10 times earnings)
Assets
Now valuation of Assets, but excluding earnings for now (i.e. total real estate funded by sale of preferred shares):
$700 million divided by 750 million OS = c. $0.93 share = Market Cap of $700 million (Realistic/ fair market valuation?)
If add in the Market Cap which could be supported by Earnings as mentioned above:
i.e. Market Cap supported by Assets + Market Cap supported by Earnings:
$700 million + $150 million (based on PE 5) = $850 million Market Cap
$700 million + $300 million (based on PE 10) = $1 billion Market Cap
So if OS = 750 million
$850 million Market Cap = $1.13 share
$1 billion Market Cap = $1.33 share
If the $700 million is assets was paid for by the preferred shares, the conversion would be to $700 million worth of common shares.
- If HCPC price was at $1.13 share (PE 5) that would equate to 620 million additional shares.
- If HCPC price was at $1.33 share (PE 10) that would equate to 563 million shares
Total Number of OS shares could be between 1.31 billion and 1.37 billion shares after conversion of preferred shares (and taking into account the 10:1 Reverse Split):
So if OS = 1.35 billion shares
$850 million Market Cap = $0.63 share
$1 billion Market Cap = $0.74 share
This remember, is all based on an 10:1 RS and after Preferred Shares are converted. Assets are factored in as well as potential earnings to assess a fair market valuation of share price, and it is that figure that is used for the preferred share conversion to common shares.
In both cases, the share price gets above the 25c threshold for OTCQX Prime tier.
Ok, that's it for now....hope I light a fuse and get a discussion going, only so much to talk about when it comes to the ticker movements:)
Do I have a preference? Well for me Option B has a lot of merits, gets the share structure back to a more reasonable level and probably allows uplisting to OTCQX in a reasonable timeframe.....if the reverse split is supported by strong fundamentals and pr from a group such as Gregory FCA, to support price, then we could come out ok.......the company has mentioned RS may be considered in helping to uplist but only if strong fundamentals, so we should not rule this out imo.
There may be other scenarios.....open to those as well:)
GLTA
Will do Cash, just working on a second scenario.......nearly there:)
GLTA
Agreed no19one88........as I mentioned in my previous post, it is achievable, just want to see the gameplan they have worked out.........also wondering if they engage Gregory FCA, as they planned to do last year......to act as PR consultants to them....would be a very good move imo......they have go some great companies on their books....
GLTA
Thanks Cash, good news:) Well with the audit and the plan to uplist to OTCQX and all that is happening with the company of late just can't wait to see how this unfolds....they must have a gameplan. I've done some valuations based on assets and earnings and factored in the preferred shares and it can be done......the uplist that is:)
GLTA
Recent mention by HCPC CEO on WallSt.net interview on March 13th 2008, of an audit being carried out at present:
http://heritagecapitalcreditcorp.com/Wallstdotnet_Intereview_31308.pdf
They have also mentioned plans of future uplisting to OTCQX........some background info:
http://www.otcqx.com/otcqx/home
PRIME QX TIER
Designed to identify issuers that are operating companies with audited financials, but not of sufficient size to be PremierQX. Entry to the PrimeQX tier requires:
Ongoing operations (no shells, blank check or special purpose acquisition companies);
The company may not be subject to any bankruptcy or reorganization proceedings;
The company must be duly organized, validly existing and in good standing under the laws of each juridiction in which the company is organized;
A minimum bid price of $0.25;
At least 50 beneficial shareholders, each owning at least 100 shares of the Company's common stock;
Proprietary quotations published in the Pink Sheets;
Ongoing quarterly and annual financial reports posted on OTCQX.com or EDGAR for SEC Registered companies. Annual reports should be audited and prepared in accordance with US GAAP; and
Inclusion in the Standard & Poor's Corporation Records or Mergent Manuals (fka Moody's Manuals), which satisfies the Blue Sky requirements for secondary transactions in many states, together with a list of any other states in which the security is Blue Sky compliant and eligible to be sold by brokers in those states;
DAD Letter upon application and annually thereafter to Pink Sheets LLC confirming that the issuer has made adequate current information publicly available and meets the tier inclusion requirements.
For more detailed information on admission criteria, please see the OTCQX Rules for Issuers.
GLTA
So if we look at the assets HCPC will have on their books in the valuation....all imo:
When they finance all the current loans on their books (through the selling of their preferred shares):
Small Hotel I
$808,000
Status:
Closed February 22, 2008
Construction/Renovation Financing Funded February 29, 2008
Office Building
$10,307,000
Status:
Closed February 26, 2008
Phase I Funded February 28, 2008
Note: The Company and the Customer have shareholders in common
Hotel Resort II
$672,093,000
Status:
Closed March 13, 2008
Funding is expected to begin on or before May 30, 2008.
This total comes too (subject to final funding for GSR) = c. $ 683 million
These are financed by HCPC selling preferred convertible shares to investors.
A.In terms of assets to current outstanding common shares, HCPC will have:
$683 million divided by c.7 billion = $0.095c assets per share on it's books
(need to also think about OS, the preferred share conversion to common shares, the buyback and how things will pan out with regard to all these issues)
B. In terms of capital HCPC would earn 0.5 to 1% on funding loans. So that would be between $3.41 million to $6.8 million depending on %.
C. In terms of revenues HCPC would also earn a monthly revenue on the loans, from which moneys would be paid to preferred shareholders as a dividend.
D. Also remember, when they portfolio the loans and roll them into BCLOC programme and sell securities to investors they also have the opprtunity to earn a lump sum of up to 5%. Previously they have stated the 5%, it remains to be seen if the market when it recovers, would still offer those kinds of % imo. So as and when this occurs, they could earn up to an additional $34 million, when the BCLOC securities are sold.
So when valuing HCPC, think it is important to remember their assets as well as the revs.....also, assume that this is just the start for the business......will be interesting to see how they propose to finance future loans (raise more capital/ sell more preferred shares?. other alternative?), or whether they wait until the credit market recovers, so they can free up capital by selling their poold loans as securities.....see point D above, and start the whole process again.
If anyone can add more insight into the valuation process, especially with regard to how company assets would be reflected in market cap/ share price valuation, it would be very welcome.....
GLTA
From my last post:
"Also remembering that the valuation for GSR could be much more...up to $1.3 billion
http://forums.biggerpockets.com/about13564.html"
This may be of more benefit to RELM, as they have a property who's potential valuation is much greater than what they paid for it....
GLTA
Shareholders Letter....recent one/ HCPC Valuation:
http://heritagecapitalcreditcorp.com/Shareholder_letter_22208_2.pdf
Bit more on future finance and company valuation for HCPC:
Extracts:
" As many of you are aware, there has been a freezing up of the capital markets investment in structured finance products. Because of this development, ICCC will have to portfolio (hold on its books) the transactions it closes until such time as the markets begin to recover."
i.e. Before they can roll the loans into BCLOC programme and sell the securities to institutional investors/ others, earning up to 5% fee for overall loan pool total.
Share buyback:
"As previously announced the company intends to repurchase shares with the revenue from the funding of projects. Changes in the manner of funding, will decrease the upfront fees earned by ICCC, however, ICCC will earn additional interest income from the portfolio it will hold. ICCC will allocate up to 35% of the upfront fees earned to share buyback and additionally will use a portion of the interest income generated monthly to repurchase stock."
So basically HCPC will earn:
1. Initial Origination fee of 0.5 to 1%.....of which up to 35% goes to buyback
2. Monthly interest on the loans......of which presumably a % will be used to pay the dividends on the preferred shares, running costs etc....with a portion going to buy back.
and the will also have:
3. Major real estate assets/ titles on their books (portfolio of loans)......up to a total value initially of $800 million or so (in 2Q at least when GSR is financed) and possibly much more in due course imo asumming they carry on with developing their business:)
Also remembering that the valuation for GSR could be much more...up to $1.3 billion
http://forums.biggerpockets.com/about13564.html
You have to build this asset into the equation when valuing the company, not just the initial origination fee and monthly revenues. Anyone feel like doing a valuation exercise for HCPC, with this element included as well?:)
When credit markets improve, HCPC will aim to pool their loans, place in a Trust and sell the securities (bonds) to institutional investors, earning up to 4/5% imo.
GLTA
Yes, that's the main business plan, to close/ fund loans, roll them into the BCLOC programme and sell the securities (bonds) onto institutional and accredited investors...that's where the big money will be made....4/5 % etc......however, because of the credit crisis, everybody is very cautious of buying securities at present.......but if you have a much more secure loan product for lender and borrower alike and a system of detecting potential defaults early....you will hopefully be in a much stronger position when the markets improve......now I wonder who may have such a product/ system?:)
GLTA
You also need to remember that this is initial income.....when the bond market recovers they will have the loans and should hopefully be in a better position to sell the BCLOC securities to investors...and get the higher %. Until that occurs, they are buying going ahead and funding major deals and gaining a lower %......with someone elses money funding the whole process through buying preferred shares.....so I'll take that for now:)
GLTA
http://www.centralgroupcompanies.com/newsandevents.php
http://bobpace.net/
This is a bit out of date now, but background....Bob Pace linked up with Tom Schrade in the deal to by the Reno Hilton in 2006...
http://www.inbusinesslasvegas.com/2006/06/09/feature3.html
GLTA
More on JP Morgan Chase Commercial Mortgage Securities Corp, Commercial Pass-Through Certificates, Series 2006-FL2....as rated by Fitch:
http://www.thefreelibrary.com/Fitch+Rates+J.P.+Morgan+Chase+Commercial+Mortgage+Securities+Corp.,...-a0155102396
Extract:
"The certificates represent beneficial ownership interest in the trust, primary assets of which are 15 floating rate loans having an aggregate principal balance of approximately $1,501,015,641, as of the cutoff date."
Think GSR must have been one of those 15 loans, placed into this trust when it was bought back in 2006 imo.
GLTA
http://forums.biggerpockets.com/about13564.html
GSR in trouble in October 2007...see link above...and valuations:)
GLTA
Ok, this is my take on Brent's DD. I've inserted my comments into the statement:
"WELLS FARGO BANK, NA, as trustee for the benefit of holders"...........
Neilhk: i.e. Wells Fargo looking after the individuals/ institutional investors who purchased the securities, that financed the initial purchase of the Reno Hilton in 2006, which then became GSR imo..............
"of JP Commercial Mortgage Securities Corp, Commercial Pass-Through Certificates, Series 2006-FL2"...........
Neilhk: i.e securities sold by JP to finance the deal imo............
"and for holders of the Non-Trust Partition interest ( " Beneficiary")".........
Neilhk: i.e JP who issued the binds, this portion is their revenue/ income earned in handling the deal/ loan imo)................
"is the legal owner and holder of the original promissory note (s) and all other indebtedness secured by the following Deed of Trust..."
Neilhk: I read this that Wells Fargo, as Trustees, took on responsibilty for safeguarding the interests of those involved in the Deed of Trust, to resolve the financial situation. I think they are appointed to this role as part of the requirements associated in resolving foreclosure issues imo, but if anyone can help on this point it would be appreciated.
Assume the way that this is handled is that the property needs to be sold asap, to pay back the loan/ debt to JP and the individuals/ investors who bought the securities/ pass-through notes.
Selling GSR for $300 million would have enabled them (Wells Fargo) to close this out. The new buyer of the property would have provided the capital to pay back this debt.......
How did Wells Fargo go about finding a buyer? It looks like RELM bought GSR.....how did they get in on that deal.....?
'Someone' put up the cash to buy the convertible preferred shares from HCPC (with a fixed rate of return), to give HCPC sufficient capital to lend to RELM to purchase GSR......i.e. c. $ 670 million..including money presumably for development of the property in the future?......And so resolve the financial issues of GSR, which Wells Fargo Bank were responsible for closing out. The question is who (advised by HCPC IR that several parties probably involved) put up that amount of capital?
HCPC and their contacts obviously moved very quickly to pick up this proprty in the fire sale imo
GLTA
Useful link to glossary of terms:
http://www.tdsf.com/foregloss.htm
GLTA
Great DD Brent:
Trying to find out some more about the companies mentioned here and how they are connected...and what it all means:)
Firstly, definitions:
Pass-through Certificate
http://financial-dictionary.thefreedictionary.com/Pass-through+Certificate
" Fixed-income securities that represent an undivided interest in a pool of federally insured mortgages put together by the Government National Mortgage Association (Ginnie Mae).
Notes:
Mortgage-backed certificates are the most common type of pass-through, where homeowners' payments pass from the original bank through a government agency or investment bank to investors."
Am I right in thinking these securities were issued by JP Commercial Mortgage Securities Corp.......presumably to fund the original loans for GSR, to purchase the property back in mid- 2006? The GSR was purchased then for $150 million + maybe a loan for improvements for the development? Up to the $223 million as stated in Brent's post?
http://www.chase.com/ccp/index.jsp?pg_name=ccpmapp/commercial/home/page/commercial_banking
Trustor:
Grand Sierra Operating Corp. was getting into legal difficulties last year with Dow Ventures LLC:
http://dockets.justia.com/docket/court-nvdce/case_no-3:2007cv00377/case_id-55919/
Interesting...Dow Ventures LLC is the Venture capital arm of Dow Chemicals:
http://www.rochesterhills.org/business_climate/smartzone/venture_capital_firms.asp
Extract:
" Dow Venture Capital, a corporate venture capital group within The Dow Chemical Company, provides capital and other developmental resources to start-up companies that meet Dow Venture Capital investment objectives. Dow Venture Capital has committed over $300 million globally to companies and venture funds involved in Life Sciences and Biotechnology, Communications and Information Technology, Electronics, and Materials Science. Dow is a leading science, technology and manufacturing organization with annual sales of $28 billion."
This may not mean too much as the amount DOW was seeking was $3 million and the companies they normally back don't seem so related here, but may have helped push GSR 'over the edge'....leading to foreclosure?
Trustee:
Is this the organisation that holds/ held the title of the property?
http://www.stewarttitlereno.com/
When GSR foreclosed, were Wells Fargo Bank appointed, as an independent 3rd party, to act as arbitrator is resolving the matter? Not certain of the situation with regard to foreclosure and the mechanism in place to resolve the situation.
Initial thoughts, JP raised the money for the loan by selling securities/ pass through notes to investors (mortgage backed securities). When GSR foreclosed, Wells Fargo Bank was brought into sort out the mess.
And we know, Wells Fargo has had links previously with HCPC maybe this is the connection.......which linked HCPC to GSR?
From I-Box and Cash DD:)
PROOF THAT BCLOC IS REAL
File Number: 4074820 Incorporation Date / Formation Date: 12/09/2005
(mm/dd/yyyy)
Entity Name: BCLOC TRUST 2005-3
Entity Kind: STATUTORY TRUST Entity Type: GENERAL
Residency: DOMESTIC State: DE
REGISTERED AGENT INFORMATION
Name: WELLS FARGO DELAWARE TRUST COMPANY
Address: 919 NORTH MARKET STREET SUITE 1600
City: WILMINGTON County: NEW CASTLE
State: DE Postal Code: 19801
Phone:
REGISTERED AGENT FOR BCLOC
File Number: 3510387 Incorporation Date / Formation Date: 04/04/2002
(mm/dd/yyyy)
Entity Name: WELLS FARGO DELAWARE TRUST COMPANY
Entity Kind: CORPORATION Entity Type: BANK
Residency: DOMESTIC State: DE
REGISTERED AGENT INFORMATION
Name: WELLS FARGO DELAWARE TRUST COMPANY
Address: 919 MARKET STREET, SUITE 1600
City: WILMINGTON County: NEW CASTLE
State: DE Postal Code: 19801
Phone:
GLTA
and that's just initial revs....when the bond market recovers they should be able to sell the securities to institutional investors, under the BCLOC programme, as originally intended....
GLTA
Recent 13th March 2008, WallST.net interview transcription posted on HCPC site.....bold is my own emphasis
http://heritagecapitalcreditcorp.com/Wallstdotnet_Intereview_31308.pdf
Heritage CEO’s, March 13, 2008, Three-Minute Interview by Wall St.Net
Tracee Tolentino, host of the “Three Minute Interview at Wall St.Net” interviewed
G. Carol Johnson about Heritage Capital Credit Corporation on March 13, 2008.
Below is the transcription of that Interview.
Tracee: Next on is Carol Johnson, CEO of Heritage Capital Credit Corporation. The company trades its shares on the Pink Sheets under the symbol “HCPC”. Heritage Capital Credit just announced its 2007 year end preliminary financials. Carol, thank you for joining us today.
Carol: Thank you, Tracee.
Tracee: Now, before we get into your announcement today, briefly tell us about the company and the company’s strategic vision for the future.
Carol: Heritage Capital Credit Corporation has a 13-year history in the residential lending business, but in the last four years, we’ve focused on arranging financing for specific special purpose corporations that will hold revenue-producing assets, such as real estate. Given what’s going on in the credit markets, we’ve had to adjust our vision and adjust how we implement our business model; and, to do that we’ve had to use our equity and call in an independent third partly lender to support our transactions. The most important thing that has changed is we’re trying to adjust our business model and survive in these turbulent times.
Tracee: Great. Now Carol, if you could give us a brief overview of the numbers you released and how you’re looking forward into the New Year.
Carol: We’re glad 2007 is over because we see great things for in 2008. We posted our preliminary financials and we call them preliminary, because we are in the midst of an audit as we speak. Most importantly, since the end of the year in subsequent events, Heritage has closed on two transactions in late February and those closings are projected to show very positive financial performance in the first quarter 2008.
Tracee: Great. Carol Thank you for taking the time to join us.
Carol: You’re very welcome. Tracee.
Tracee: Thank you. That was Carol Johnson, CEO of Heritage Capital Credit Corporation. For More information on the Company, visit Wall St. net or to view the financials in full, visit Heritage CapitalCreditCorp.com.
GLTA
Is this a trip to the moon, mars..... or the stars.......I'd settle for any of them...........:)
GLTA
Well I think so rolo.....I asked the question to a Technical Analysis expert as to when, in their opinion, did the accumulation of HCPC begin? I suggested c. February 25th as that is when the accumulation indicator crossed the centreline..........I am on level 1 of TA................but they mentioned that in their opinion it started in December............
Well if the company has not started the buyback, but another party (ies) have been accumulating over the last 3-4 months or so (and even if there may have been some more shares added to the float, which has been suggested by some here but not confirmed one way or the other, yet) .........you have to ask the questions of who are they and why?:)
Someone wants to buy these shares up cheap.....apart from us longs of course:)
GLTA
Think it is new...rememember reading 'clients' but not 'brokers'...if they begin to roll this out to a network of brokers then it could get out of control...in terms of loan applications......hopefully:)
GLTA
I don't think that HCPC has started the buyback yet imo....but I think another party could well be loading up down here at these low prices.......I don't pretend to be an expert in this, but if you read Geaux Fish's posts you may begin to understand the view that there may be other vested interests involved. They may want to hold the price down at this level, until they have loaded up with enough shares to let this go on a run.....again read GF's posts for more background on this.......
It could be MM's (Market Makers), it could be the conduit lender (future HCPC merger partner), it could be both working together............it could of course be none of these, but if I were to 'hedge' my bets.....something is happening here at the present.....all imo.
GLTA
Know that feeling Libra.........just waiting for HCPC, The Movie.......should be coming to a cinema near you soon......:)
Something is going on here, showing major accumulation on the charts...........'someone' is loading up at these levels as well as us longs.....imo
GLTA
Well with a large insider vested interest + the large vested interest in what we think is a major player (i.e. conduit lender) imo......you are probably right.....:) But it's fun to speculate and it's fun to try and find out who they are, what is going on.........and watch things gradually unfold........who needs TV for drama when you have i-hub:)
GLTA
Agreed, you wouldn't risk up to $1 billion unless you were certain you could make a lot more.......and just as important, that the level of risk was acceptable to you.......we worry over our own small investments......imagine if you had up to $1 billion on the line:).......think they will have a gameplan in place here imo
GLTA
The conduit lender will/ has put up the capital to buy the HCPC preferred shares imo. This gives HCPC the funding to close and finance the loans and buy the properties....again imo. This all has some connection with the proposed future merger between HCPC and the conduit lender i.e. how they have structured that deal and how they proposed to capitalise HCPC on the road to developing the business and, utlimately, the goal of becoming a bank. Aside from the preferred shares, I also think the merger partner has been acquiring a major common share holding which has assisted HCPC in the shorter term to finance the business.
The recent 'events' would fit in well with this pr from last year:
http://heritagecapitalcreditcorp.com/sitebuildercontent/sitebuilderfiles/hcpcengagesnasdfirm627.pdf
Heritage Capital Credit Corporation Engages NASD Firm to Raise Debt and Equity
June 27, 2007
.........engagement of a NASD member firm, to raise equity and debt for the purpose of providing working capital for the company and to fund the BCLOC Promissory Notes.
The initial capital raise will be an amount mutually agreed upon to assist the company with its capital needs through a debt and/or equity offering.
Mentioned this before, but you don't 'mutually agree' an equity/debt offering with another company unless there is some deeper involvement/ relationship imo.
GLTA
Good call Cash........must be I think:)
GLTA
MERL
RELM
CREMEL = RELM or MERL + CE
gee.......where's Robert Langdon or Tom Hanks when you need them.......
GLTA
Thanks GF, interesting to hear about the TA side of things here. In your opinion, when did the accumulation/ buying really begin....? Was it around Feb 25th......? Any comments appreciated on this GF.
tia
GLTA
From Cash DD....
http://investorshub.advfn.com/boards/read_msg.asp?Message_id=27674954&txt2find=market
ED JOHNSON
902 MARKET ST Recorded: 04/01/2006
WILMINGTON, DE 19801
NOTICE THE RECORD DATE - 4/1/2006.
and
WELLS FARGO DELAWARE TRUST COMPANY
Michael W. Orendorf
Vice President
919 North Market Street, Suite 700
Wilmington, DE 19801
(302)575-2000 FAX (302)575-2006
Almost neighbours....
and don't forget this....(but no way of knowing whether they are still involved or not...)
File Number: 4074820 Incorporation Date / Formation Date: 12/09/2005
(mm/dd/yyyy)
Entity Name: BCLOC TRUST 2005-3
Entity Kind: STATUTORY TRUST Entity Type: GENERAL
Residency: DOMESTIC State: DE
REGISTERED AGENT INFORMATION
Name: WELLS FARGO DELAWARE TRUST COMPANY
Address: 919 NORTH MARKET STREET SUITE 1600
City: WILMINGTON County: NEW CASTLE
State: DE Postal Code: 19801
Phone:
and RELM just bought 1300 Market Street....:)
http://relmholdingsinc.com/1300MktStWilmingtonDE.pdf
Should hopefully see things being clarified soon......imo....if Wells Fargo Delaware Trust Company are involved, I see them as potential puchasers of the BCLOC notes/ when the loans finally become securitised imo. Think there will still be a separate conduit lender who puts up the short term bridging finance to initially close and fund the loans.....with whom HCPC will merge with in due course.
As to the identity of the conduit lender...???:) Time will tell....some interesting leads and suggestions here of late...
GLTA
Interesting connection of MERL...now RELM, to an Investment Bank...The Williams Capital Group.....a NASD member firm....who knows. may still be a business connection there of some sort...
http://www.willcap.com/HomePage
http://www.allbusiness.com/company-activities-management/company-structures-ownership/6115457-1.html
GLTA
Thats interesting no19one88:)
"from the Horwath website....here's a list of Financial Institutions Horwath works with:
http://www.horwathhospitality.com/repclientslist.php
includes;
Wells Fargo Bank"
And Cash found:
http://investorshub.advfn.com/boards/read_msg.asp?Message_id=27998016&txt2find=wells
File Number: 4074820 Incorporation Date / Formation Date: 12/09/2005
(mm/dd/yyyy)
Entity Name: BCLOC TRUST 2005-3
Entity Kind: STATUTORY TRUST Entity Type: GENERAL
Residency: DOMESTIC State: DE
REGISTERED AGENT INFORMATION
Name: WELLS FARGO DELAWARE TRUST COMPANY
Address: 919 NORTH MARKET STREET SUITE 1600
City: WILMINGTON County: NEW CASTLE
State: DE Postal Code: 19801
Phone:
This dates back 3 years, but you never know.....if they were interested in BCLOC's then, they may still be interested now....but they are already a bank and HCPC want to form a bank.....and..... I need a coffee:)
GLTA
Agreed:) I am just not sure where to begin on that one...and it's late here now.......and I am DD'ed out.:) Closing comment of today is that it is looking very good going forward...:)
Have a good one:)
GLTA
NASD Member Firms......c.5100 in total...fyi are registered on this site:
http://www.finra.org/InvestorInformation/InvestorProtection/ChecktheBackgroundofYourInvestmentProfessional/index.htm
GLTA
Conduit Lender: Profile for future HCPC Merger Partner:)
Ok, after much research, I think I am beginning to get a better picture of what the merger of HCPC will 'look like':)
Check out Conduit Lenders in DD section of I-Box and todays posts......if you want more background on them...
Firstly, they will be a:
A. Major institution
Will be one of the following:
-Investment Banks
-Hedge Funds
-REITS
-International Banks
-Credit Companies
-Opportunity Funds
-Financial Advisors To High Net Worth Individuals
and possibly
-Pension funds
-Insurance Companies
Why?
Check out Conduit Lender posts today and in I-Box....
Secondly, they will be a:
B. NASD Member Firm
http://investorshub.advfn.com/boards/read_msg.asp?message_id=23821579
Why?
"The initial capital raise will be an amount mutually agreed upon to assist the company with its capital needs through a debt and/or equity offering."
Clue: Mutually agreed......
and Shareholders Letter:
"A: A potential funding source has advised us that the special purpose entity (SPE) that issues the BCLOC Securities has made changes in the structure to reflect the current credit market conditions and expects to offer direct pay “AAA” rated notes versus collateralized debt obligations or CDOs. Further, they have advised that the restructuring is expected to allow the funding source to offer BCLOC Securities at a substantial amount over the $300 million previously mentioned in the press release."
To offer securities you have to be NASD registered....
Thirdly, they will have:
C. Market Cap/ Assets
> $1 Billion
Why? If they are putting up to $1 billion to buy Preferred shares in HCPC, they must have some cash spare....:)
Ok, maybe not much further in terms of identifying them, but if they have this profile, as I think they have, then I am not sure that I mind so much....:)
GLTA
GSR/ HCPC Funding/ RELM.....
We know from this that GSR was available in a firesale in February/ March this year...2008:)
http://www.fusedworld.com/Real_Estate/North_America/USA/Nevada/Reno/Hotel_for_sale_in_Reno_USA_24991.html
This Hotel for sale in Reno, USA was first listed on 2008-03-08 03:27:56.
Extract:
"Don't know cap rate, owner took out a 2nd @ 18%"
I think this refers to the $400 million financing loan that they took out and as mentioned in the HFS press release of January 2007......this was presumably sourced by HFS through a conduit lender.......or institutional investor:)
http://www.hotelinteractive.com/mdx.asp?page_id=3000&article_id=340
So when you look at the financing ICCC have mentioned on their website for the GSR hotel.....$672 million....
http://independentcapitalcreditcorp.com/id2.html
that broadly equates to:
$300 million purchase price for GSR + $400 million financing = $700 million
So it looks like they are proposing to take on/ refinance the amount for the GSR purchase price + the additional/ secondary loan....which was presumably taken out to finance the improvements to the development.:)
Could it not be that the Conduit Lender (i.e Institutional Investor), who maybe missed out on the the first deal for GSR back in January 2007, along with HCPC, is now involved again in the refinancing of this deal....?
And could it not also be the case that they have decided to take GSR public, as Whichard had intended ( before they ran into financial difficulties), through RELM:).....and are they purchasing the Preferred Shares in HCPC...up to $1 billion worth......so they can finance this and other projects?:)
GLTA
Thanks, but also drawing many threads from others great DD too...Cash, Lenderboy and many others.....
GLTA
thelimeyone......
.........now wouldn't that be clever.......;) now do I think that is what is happening?......from the 'House of Cards'....the famous quote.....'You may think that.......... I couldn't possibly comment'.....;)
GLTA
Just got this PM from Cash.....)
neil can you post this.. i am in vegas... found this yesterday
CASHFLO VEGAS DD
http://www.vertical-group.com/about.htm
i wonder if this is MM - VERT
LOL INTERNET saw that they had a huge bid on FRIDAY
CASH
Hotel Resort II $672,093,000 Status: Closed March 13, 2008
Interesting... Try and follow this...watch for the dates...:)
Friday 25th May 2007
http://triangle.bizjournals.com/triangle/stories/2007/05/28/story12.html
Whichard's family is majority owner of Grand Sierra Resort Corp., the group that purchased the largest hotel property in Reno in 2006 in addition to making other Whichard's family is majority owner of Grand Sierra Resort Corp., the group that purchased the largest hotel property in Reno in 2006 in addition to making other real estate investments around the country.
and:
In the meantime, Whichard is focusing most of his attention on the redevelopment of the Reno property, formerly the Reno Hilton, which the group bought from Harrah's Entertainment in June 2006 for about $150 million.
and
Grand Sierra Resort Corp. is a private company, but Whichard says the company is working to go public late this year or early in 2008.
Now in between Whichard and his group buying it in June 2006 and the announcement of GSR going public in May 2007 this happened:
http://investorshub.advfn.com/boards/read_msg.asp?message_id=28028135
Hotel Financial Strategies Announces Financings in the Amount of $400,000,000 1/10/2007 GRAND SIERRA RESORT
Extract:
"One of the unusual aspects was that we did a bond offering rather than a conventional mortgage."
Notice that it talks about the $300 million GSR and also $400 million financing. I think that is what it was, additional financing to allow GSR to continue with it's developments....
at the same time:
Wilmington, DE – February 27, 2007- Heritage Capital Credit Corporation
(OTC:HCPC) today announced that one of its affiliates has secured an institutional
investor to purchase up to $300 million in BCLOC Trust Notes, which will fund
commercial projects. The closing on this funding is scheduled to begin on March 15, 2007.
These closing didn't happen, but I think HCPC was somehow involved with GSR/ an institutional investor at that point.
We also know as of May 2007, Whichard is still in control and talking of taking GSR public by the end of 2007 or early 2008.
Did HFS then just help with finance, as mentioned under recent transactions on their website, rather than an actual purchase of GSR?
It maybe than although the BCLOC deal failed to materialise, funding was arranged for GSR by alternate means at that time?
Thoughts?
Then we know on this website:
http://www.fusedworld.com/Real_Estate/North_America/USA/Nevada/Reno/Hotel_for_sale_in_Reno_USA_24991.html
This Hotel for sale in Reno, USA was first listed on 2008-03-08 03:27:56.
"1995 rooms. Currrent management is a mess. New owner would have to come in and clean house. They were trying to sell for 600M. Now, with a quick close, they can buy it for 300M (but with a very fast close - 7 - 15 days). Don't know cap rate, owner took out a 2nd @ 18%. If buyer doesn't have a gaming license, we have the person that they can use for that purpose until they get their own. Let's get it closed!Worth 1B - 1.2B. Selling for 300M. It belongs to the bank.RENO/NEVADA
RELM have recently set up a company called GSR LLC and HCPC are funding a loan of $672 million or so.
File Number: 4515450 Incorporation Date / Formation Date: 03/07/2008
(mm/dd/yyyy)
Entity Name: GRAND SIERRA RESORT CORP. LLC
Entity Kind: LIMITED LIABILITY COMPANY (LLC) Entity Type: GENERAL
Residency: DOMESTIC State: DE
So it looks like Whichard/ GSR were forced to sell......at a real knockdown price too. HCPC/ RELM et al just happened to be on hand to snap it up.........and there must have been ready money to do so....the institutional investor/ conduit lender from March 2007, purchasing preferred shares this time rather than BCLOC notes....?
Thoughts?
GLTA