In the bidding centre you will encounter two types of bid: Agreed and Non-Agreed.
The first type gives you the assurance that you and the borrower have shaken on the deal and no-one will come along and outbid you. The second type is subject to the normal auction process and your fellow investors will bid against each other to invest. Each deal can be comprised of one type of bid or a mixture of the two.
Depending upon the type of auction and whether or not you’ve submitted an Agreed Bid, you may be asked to remit either a deposit or full payment towards the end of the auction period rather than at the time of bidding.
When the auction is complete and the borrower is confident of going ahead, the deal will move into formal due diligence. At this point, CapitalStackers will formally instruct and coordinate the professional team, review all reports coming out of it and post the reports to the appropriate data room.
At the same time, you’ll be asked to pay any outstanding balance of your investment to conclude the deal.
By investing in a scheme, you become a deal participant through Capitalstackers Trustees Ltd (“CTL”) for the duration of the deal.
Any payment you make is collected in CapitalStackers' FCA regulated client account, which is controlled and administered by Hallidays Chartered Accountants on behalf of the participants under a strict service agreement.
Hallidays is mandated to do only one of two things: (a) upon satisfactory completion of due diligence, security and documentation checks, transfer the appropriate monies from the client account to CapitalStackers' solicitor for the sole purpose of closing the deal; or, (b) return the funds direct to the member's registered bank account in the event that the deal is abandoned.
In most circumstances, due diligence will confirm the information posted in the deal room and data rooms and the CapitalStack monies will be transferred to the solicitor, who will deal with the formalities and documentation (including making sure the senior debt and borrower equity are in place).
Occasionally, due diligence may unearth information that affects the previously posted information. If this results in an adverse change to the risk profile, members will be polled and asked to confirm their willingness to invest. If necessary, the borrower will be asked for an additional equity injection or to agree to an increase in the CapitalStack coupon.
Any members who decide to withdraw in these circumstances will receive a full refund. In the unlikely event that due diligence reveals an insurmountable problem, the deal will be abandoned and all members fully reimbursed.
After completion, CapitalStackers will monitor the progress of the deal and post regular reports to the deal room and data rooms. Access to these is only available to investors in the deal and other members who have paid a deposit on a bid in the secondary market.
Where applicable, CapitalStackers will distribute current interest payments direct to the member's bank account. The initial investment and accrued deferred coupon are paid direct to the member's bank account upon repayment of the deal by the borrower.
