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Post by spareafewcoppersguv on Nov 6, 2017 16:13:49 GMT
I'm sure this has been debated elsewhere but can't find it, so could someone explain what is the benefit of splitting new property loans into multiple trances each ranking equally? Thanks.....
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hantsowl
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Post by hantsowl on Nov 6, 2017 21:46:50 GMT
I'm sure this has been debated elsewhere but can't find it, so could someone explain what is the benefit of splitting new property loans into multiple trances each ranking equally? Thanks..... The smaller tranches tend to be more liquid with people more likely to buy if availability is low. I know this should make no difference, but psychology plays a big part in investing. This started some months ago when a large loan was proving difficult to shift and Collateral decided to try releasing large loans in smaller tranches. Seems to work, but does tend to make the SM more difficult to look through with numerous small bits available most of the time.
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elliotn
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Post by elliotn on Nov 7, 2017 1:51:00 GMT
Waverledge filled quicker than DL46/8, the mini tranches filled quicker for Bolton than a mass, illiquid dump. Investors seem to prefer the option of re-selling from a choice of smaller, potentially more liquid tranches than being stuck in one large Q.
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