spiral
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Post by spiral on Dec 30, 2017 12:54:07 GMT
That was quick. Great stuff. Could a mod please pin this thread?
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star dust
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Post by star dust on Dec 30, 2017 16:09:27 GMT
That was quick. Great stuff. Could a mod please pin this thread? As it seems to have been viewed substantively since it's inception, I've done just that . Looks like it's made history as the only pinned RateSetter thread to boot .
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oik
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Post by oik on Jan 27, 2018 12:28:00 GMT
That's a big drop now showing. Cover down to 112% from 116.4% in just 5 days. Suggests without a decent margin, we could see sub 100% in the blink of an eye - and being in Rolling might not help much.
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ashtondav
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Post by ashtondav on Jan 27, 2018 13:05:48 GMT
Being in rolling is the safest place in RS. I’m selling out of RS when PF gets to 105% - if I can! RS ought to be hung out to dry for theoretically maintaining an objective for the PF of 125%+. That figure has become as illusory as the legendary AssetzCapital Provision Fund which is an enigma hiding behind a curtain!
I'm getting a little concerned about p2p at the moment. Zopa+ is enduring terminal underperformance, AC and FS maintain an undignified silence about some key bad debts, and RS appear to be unable to maintain a 125% PF cover. Does that all sound sweet? Or does it smell of manure?
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nairda
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Post by nairda on Jan 27, 2018 15:59:59 GMT
Being in rolling is the safest place in RS. I’m selling out of RS when PF gets to 105% - if I can! RS ought to be hung out to dry for theoretically maintaining an objective for the PF of 125%+. That figure has become as illusory as the legendary AssetzCapital Provision Fund which is an enigma hiding behind a curtain! I'm getting a little concerned about p2p at the moment. Zopa+ is enduring terminal underperformance, AC and FS maintain an undignified silence about some key bad debts, and RS appear to be unable to maintain a 125% PF cover. Does that all sound sweet? Or does it smell of manure? I share your concerns about AC, RS and Zopa. Mrs N and I did return to Zopa last year, but we are running our accounts down agian. I also returned to RS 5 year market with a minimum interest rate of 6% and so far I have managed to maintain that, albeit with brief excursions into rolling when rates were low. The provision fund is the big concern for me too. As for AC, I am still there and waiting to see what happens in the coming weeks regarding the infamous four turbine loans. I still rather like the platform. The only problem with pulling out of p2p is where the heck to invest and get a half decent return. I am at my personal maximum in shares and p2p at the moment.
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oik
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Post by oik on Jan 27, 2018 16:25:32 GMT
Being in rolling is the safest place in RS. I’m selling out of RS when PF gets to 105% - if I can! RS ought to be hung out to dry for theoretically maintaining an objective for the PF of 125%+. That figure has become as illusory as the legendary AssetzCapital Provision Fund which is an enigma hiding behind a curtain! I'm getting a little concerned about p2p at the moment. Zopa+ is enduring terminal underperformance, AC and FS maintain an undignified silence about some key bad debts, and RS appear to be unable to maintain a 125% PF cover. Does that all sound sweet? Or does it smell of manure? You may be braver than me. I now have just a fraction of what I once had with RS and will continue to reduce until the PF cover improves. It's just fallen 4.4 points in 5 days so falling to below 105% within a week isn't hard to imagine. With the likelyhood of more unpaid debt, the de facto target needs to be substantially higher than previously, not lower. In the meantime, would rather invest in asset-backed loans where I can know something of the borrower (though sometimes like reading tea-leaves), than a black-box with a "provision fund" that could disappear over-night and leave me indefinitely locked into loans I know little about.
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r00lish67
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Post by r00lish67 on Jan 27, 2018 17:03:23 GMT
Being in rolling is the safest place in RS. I’m selling out of RS when PF gets to 105% - if I can! RS ought to be hung out to dry for theoretically maintaining an objective for the PF of 125%+. That figure has become as illusory as the legendary AssetzCapital Provision Fund which is an enigma hiding behind a curtain! I'm getting a little concerned about p2p at the moment. Zopa+ is enduring terminal underperformance, AC and FS maintain an undignified silence about some key bad debts, and RS appear to be unable to maintain a 125% PF cover. Does that all sound sweet? Or does it smell of manure? In the meantime, would rather invest in asset-backed loans where I can know something of the borrower (though sometimes like reading tea-leaves), than a black-box with a "provision fund" that could disappear over-night and leave me indefinitely locked into loans I know little about. In the meantime, I would rather invest in a black box with a provision fund rather than a borrower that could disappear overnight and leave me indefinitely locked into loans I didn't know enough about. Seriously though, I invest in both, but usually feel far more comfortable with my RS/LW investments than I do sitting in the latest property mafioso's hole in the ground with planning permission and them with a suitcase of investors cash. Also, in the case of RS, don't forget that the (current) 113% interest coverage is also coupled with a 263% coverage on capital. In contrast, my latest 'asset-backed' loan default earned zero interest and lost 30% capital (MT lyth) whilst the one before that earned zero interest and a 75% loss of capital (turbine). I'm still doing well overall and earn more than the 6% i get at RS, but it's an awful lot harder work with a far more uncertain return IMV.
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ashtondav
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Post by ashtondav on Jan 27, 2018 17:08:05 GMT
Being in rolling is the safest place in RS. I’m selling out of RS when PF gets to 105% - if I can! RS ought to be hung out to dry for theoretically maintaining an objective for the PF of 125%+. That figure has become as illusory as the legendary AssetzCapital Provision Fund which is an enigma hiding behind a curtain! I'm getting a little concerned about p2p at the moment. Zopa+ is enduring terminal underperformance, AC and FS maintain an undignified silence about some key bad debts, and RS appear to be unable to maintain a 125% PF cover. Does that all sound sweet? Or does it smell of manure? I share your concerns about AC, RS and Zopa. Mrs N and I did return to Zopa last year, but we are running our accounts down agian. I also returned to RS 5 year market with a minimum interest rate of 6% and so far I have managed to maintain that, albeit with brief excursions into rolling when rates were low. The provision fund is the big concern for me too. As for AC, I am still there and waiting to see what happens in the coming weeks regarding the infamous four turbine loans. I still rather like the platform. The only problem with pulling out of p2p is where the heck to invest and get a half decent return. I am at my personal maximum in shares and p2p at the moment. I share your frustration but fear that this mass hunt for any return will all end in tears, a market collapse and big probs for p2p. And that makes me sad cos I’ve been with Zopa since 2005 and lived through the bad debt tsunami of 2008 with decent returns. With current Zopa rates I’d be under water if 2008 repeated.
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shimself
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Post by shimself on Jan 27, 2018 20:28:34 GMT
I share your concerns about AC, RS and Zopa. Mrs N and I did return to Zopa last year, but we are running our accounts down agian. I also returned to RS 5 year market with a minimum interest rate of 6% and so far I have managed to maintain that, albeit with brief excursions into rolling when rates were low. The provision fund is the big concern for me too. As for AC, I am still there and waiting to see what happens in the coming weeks regarding the infamous four turbine loans. I still rather like the platform. The only problem with pulling out of p2p is where the heck to invest and get a half decent return. I am at my personal maximum in shares and p2p at the moment. Well re AC the turbines seem problematic but it seems the GEIA PF can afford it, and in any case it would be a very unfortunate lender who was severely impacted (I know the distribution is lumpier than one would have thought). But concerns about the platform seem well ott? As for where to get returns. Well either you're old (retired) in which case you should have quite a lot in rock solid albeit pitiful return, or you're younger in which case you can afford to stay in cash for a while.
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Post by propman on Jan 29, 2018 14:19:26 GMT
That's a big drop now showing. Cover down to 112% from 116.4% in just 5 days. Suggests without a decent margin, we could see sub 100% in the blink of an eye - and being in Rolling might not help much. THere does seem to be big movements in expected bad debt. When they increase the bad debt expectation for a particular year there is often offsetting changes in others. This has lead to a large decrease in the expected bad debts for 2015 & 2014. The former is anticipating £577k when there is currently £1.14m 2 or more payments in arrears. SImilarly £180k expected receipts on defaults in excess of future defaults when there is £300k 2 or more payments in arrears. These only makes sense if they expect significant payments from defaults, although there was a recent sale of defaults where initially the expected future defaults went to similar proportions of outstanding loans suggesting that the likely recovery was minimal. Comments on the overall ratio would only be meaningful if there was confidence that the bad debt estimate was at least a good indication of the likely outturn if credit conditions remain at recent levels. As we have seen continual increases in expected bad debts to date, I don't have this confidence.
As for the capital ratio, this assumes that RS would not take any capital but would reserve all interest for the provision fund for 5 years to cover the default calls. This would be the end of RS as no-one would invest if they were not to receive interest until the provision fund had been topped up. This would only be the case if there was no hope of restarting as it would require the shareholders to write-off there investments in full! I suspect that a portion of capital will be withheld to quickly reestablish the provision fund. THey would then announce a more conservative funding of PF going forward and try to get more borrowing started at a higher rate while they reestablish confidence. Add the sheep who might not realise what had happenned and keep lending and they could survive. This woul dalso have the advantage of providing some funds to meet the older bad debts from new borrowers. As such, the capital buffer merely demonstrates over the longer term what would happen for the existing pertfolio (ie lower losses meaning someone with a portfolio proportional to the whole market would not make an overall loss if the defaults were under this multiple of current expectations, but that this would be made up of some interest offset by some capital withheld).
JMHO
- PM
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jlend
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Post by jlend on Jan 29, 2018 16:00:01 GMT
My thoughts on the RS PF for what it's worth.
I don't think I am clever enough to know whether it is being realistic about future defaults and recoveries so I defer to other posters on that.
We do know that at some time in the future that RS will IPO as they have stated. They have also stated that they will be profitable this year so they have spare cash either from this or from their large equity investors.
An IPO is unlikely to get off the ground if there are perceived to be or are issues with the PF. So I think RS would do whatever it took within reason for the PF to remain solvent prior to an IPO. After investing 8 years of their life the founders wont want to give up the not a penny lost unless they have exhausted every option.
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09dolphin
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Post by 09dolphin on Jan 30, 2018 14:38:38 GMT
I love the concept of the provision fund.
Have people taken on board that if the Provision Fund is lacking they are commited to lend at their original rate until the loan reaches it's expiry date. Thus if they are lending in the monthly market but the loan is for 12 months they are required to lend for 12 months.
I didn't know this until my neice pointed it out.
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puddleduck
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Post by puddleduck on Jan 30, 2018 15:31:40 GMT
I love the concept of the provision fund.
Have people taken on board that if the Provision Fund is lacking they are commited to lend at their original rate until the loan reaches it's expiry date. Thus if they are lending in the monthly market but the loan is for 12 months they are required to lend for 12 months.
I didn't know this until my neice pointed it out. My understanding is that its 5 years, not 12 months.
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Post by p2plender on Feb 1, 2018 14:08:26 GMT
"the founders wont want to give up the not a penny lost unless they have exhausted every option." All they have to do is nip over to Lendy for some advice as they're top notch at bending the 'not a penny lost' mantra..
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dandy
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Post by dandy on Feb 8, 2018 9:29:38 GMT
Property Developers
Purpose: Secured property loans typically for property development (typically up to 65% Loan To Value)
Loan size: Up to £7.5m
Active loans: £83m
Interest rates: Typical borrower APR: 5.0% to 9.0%
Sources of loans: Direct to RateSetter and Brokers
Protection: Provision Fund provides “first-loss” buffer against credit losses. RateSetter has security against all properties
Expected Future Losses: Estimated based on the strength of the property development and Loan To Value.
Does anyone know what the "first-loss" buffer actually is? What happens if the buffer is exceeded?
I thought that whilst the PF was in place we had cover against all losses. If a property loan goes bad can we therefore lose capital notwithstanding that the PF has cash? If so, are we sufficiently diversified as I thought all money we invest goes into the first loan(s) available and is not spread (due to full cover from PF/pooling event if PF depleted)?
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