hazellend
Member of DD Central
Posts: 2,361
Likes: 2,179
|
Post by hazellend on Feb 16, 2019 13:04:14 GMT
Decent loan, looks relatively derisked
|
|
|
Post by df on Feb 16, 2019 19:17:30 GMT
I've never understood the mechanics and benefits of new portfolio loans. Never went for it because of lower rate. Now it is going to be 12%, I'm considering to chip in. Could anyone advise me on the difference between investing in self-select loan and portfolio loan to the same borrower?
|
|
hazellend
Member of DD Central
Posts: 2,361
Likes: 2,179
|
Post by hazellend on Feb 16, 2019 19:36:40 GMT
Self select loans have a lower LTV and higher interest rate but not much in it now
|
|
|
Post by GSV3MIaC on Feb 16, 2019 20:11:33 GMT
Afaiui, portfolio loans can only be sold at par .. you list to sell out and if someone wants in, you swap cash for holding. One simple queue of people wanting to exit, or (if that is zero) of people wanting in. Much simpler than self select and the SM .. but no chance to sell at a discount for a faster exit.
|
|
|
Post by westcountry on Feb 16, 2019 20:19:05 GMT
I've never understood the mechanics and benefits of new portfolio loans. Never went for it because of lower rate. Now it is going to be 12%, I'm considering to chip in. Could anyone advise me on the difference between investing in self-select loan and portfolio loan to the same borrower? According to ABLRate's e-mail, the loan is only paying 12% for a minimum of the next six months, there's no guarantee it'll pay 12% after that period expires.
|
|
|
Post by Ace on Feb 16, 2019 20:29:09 GMT
This portfolio loan never made much sense at 8% when one could lend to the same borrower in a self select loan at 13% (especially given that the self select loans had a lower LTV).
One of the lauded advantages of the portfolio loans was that they can be entered and excited more swiftly when required. However, when I tried a small test in the previous portfolio loan my experience was quite the opposite. I suffered several weeks cash drag while waiting in a FIFO queue to get invested. It also had the add disadvantage that I couldn't see my place in the queue. So, I didn't know if I was near the front (where it would be worth waiting) or at the back (where it wouldn't). To ABLrate's credit they were helpful in informing me of my queue position whenever I asked, but this really should be displayed on the dashboard.
I also think that it could be difficult to exit. Since trades are only allowed at par, when there is a lack of buyers one will have to wait in another FIFO queue to exit. Unlike in a self select loan where one can usually discount to sell in an emergency.
All in all I can see the advantages for borrowers in portfolio loans, but I can't see a single benefit for lenders in this one. It isn't that there's anything particularly wrong with it, I've even invested a bit myself to experience the mechanics, it's just that the self select versions of this one are better.
EDIT: clashed with above 2 posts.
|
|
|
Post by Ace on Feb 16, 2019 20:36:45 GMT
I've never understood the mechanics and benefits of new portfolio loans. Never went for it because of lower rate. Now it is going to be 12%, I'm considering to chip in. Could anyone advise me on the difference between investing in self-select loan and portfolio loan to the same borrower? According to ABLRate's e-mail, the loan is only paying 12% for a minimum of the next six months, there's no guarantee it'll pay 12% after that period expires. Your interpretation could well be correct, but I interpreted it as: the loan would be 12% till term, but was guaranteed to last for at least 6 months.
|
|
|
Post by westcountry on Feb 16, 2019 20:43:15 GMT
According to ABLRate's e-mail, the loan is only paying 12% for a minimum of the next six months, there's no guarantee it'll pay 12% after that period expires. Your interpretation could well be correct, but I interpreted it as: the loan would be 12% till term, but was guaranteed to last for at least 6 months. I've re-read the relevant excerpt from ABLRate's e-mail, which is "and as such are now offering a 12% per annum interest rate on their Ablrate portfolio loan for a minimum period of 6 months" so I guess it depends on what the "minimum period" refers to - loan duration or the length of the 12% interest period. I still think it's the 12% interest which is only for a minimum period of 6 months, but I could be wrong!
|
|
|
Post by df on Feb 16, 2019 21:10:16 GMT
Afaiui, portfolio loans can only be sold at par .. you list to sell out and if someone wants in, you swap cash for holding. One simple queue of people wanting to exit, or (if that is zero) of people wanting in. Much simpler than self select and the SM .. but no chance to sell at a discount for a faster exit. Is it like on MT? You list and if someone wants it you swap the holding and each have their own proportion of monthly interest (not retained by the platform like Ly and Col do/did). I prefer discount system. Exit strategy is quite important for me, even if I'm not planning to exit. Simpler is good if the system diversify funds across large number of loans, but this is just an investment in one single loan.
|
|
|
Post by fatbritabroad on Feb 16, 2019 21:25:45 GMT
Yes I always assumed portfolio loans were going to be grouped smaller loans to multiple borrowers to aid diversity but that hasn't been the case so far
|
|
|
Post by Proptechfish on Feb 16, 2019 22:08:41 GMT
This portfolio loan never made much sense at 8% when one could lend to the same borrower in a self select loan at 13% (especially given that the self select loans had a lower LTV). One of the lauded advantages of the portfolio loans was that they can be entered and excited more swiftly when required. However, when I tried a small test in the previous portfolio loan my experience was quite the opposite. I suffered several weeks cash drag while waiting in a FIFO queue to get invested. It also had the add disadvantage that I couldn't see my place in the queue. So, I didn't know if I was near the front (where it would be worth waiting) or at the back (where it wouldn't). To ABLrate's credit they were helpful in informing me of my queue position whenever I asked, but this really should be displayed on the dashboard. I also think that it could be difficult to exit. Since trades are only allowed at par, when there is a lack of buyers one will have to wait in another FIFO queue to exit. Unlike in a self select loan where one can usually discount to sell in an emergency. All in all I can see the advantages for borrowers in portfolio loans, but I can't see a single benefit for lenders in this one. It isn't that there's anything particularly wrong with it, I've even invested a bit myself to experience the mechanics, it's just that the self select versions of this one are better. EDIT: clashed with above 2 posts. Totally agree, so far it's all about the borrower not the lender.
|
|
macq
Member of DD Central
Posts: 1,924
Likes: 1,192
|
Post by macq on Feb 17, 2019 9:16:17 GMT
According to ABLRate's e-mail, the loan is only paying 12% for a minimum of the next six months, there's no guarantee it'll pay 12% after that period expires. Your interpretation could well be correct, but I interpreted it as: the loan would be 12% till term, but was guaranteed to last for at least 6 months. From the outside looking in fair play to Abl on the rise but i assumed the bump to 12% was for the life of the loan and due to a new tranche coming.Which i guess would also be at 12% to get it to fill quicker then last time and in effect has turned it into a self select loan.That is One of the problems so far with the portfolio loans that they are to old borrowers with better rates normally on the SM I thought like others it was a type of revolving credit loan from Abl to new borrowers with a lower rate to match this products terms - not a similar product to established borrowers
|
|
blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Feb 17, 2019 9:40:58 GMT
Your interpretation could well be correct, but I interpreted it as: the loan would be 12% till term, but was guaranteed to last for at least 6 months. From the outside looking fair play to Abl on the rise but i assumed the bump to 12% was for the life of the loan and due to a new tranche coming.Which i guess would also be at 12% to get it to fill quicker then last time and in effect has turned it into a self select loan.That is One of the problems so far with the portfolio loans that they are to old borrowers with better rates normally on the SM I thought like others it was a type of revolving credit loan from Abl to new borrowers with a lower rate to match this products terms - not a similar product to established borrowers Yes, I think that was the intention, but the project has been stalled a long time and one objective must be to get at least one SPL going to restart the ball rolling. This is a fairly new borrower, who is presumably moving to the SPL wholly when the self select loans can be replaced. If they are going to borrow large amounts, then it is clear from the first tranche that they are not going to do that swiftly at 8%. But also the company and security risks do not look good for 8%, especially with the Creditsafe rating removal, which I guess they will have to make clear and explain when the new tranche is announced (tomorrow?). The 12% for six months is presumably a way of getting lift off, after which the borrower hopes to lower the rate. Ablrate have been rather jinxed with the portfolio loans so far - I hope it flies, and at 12% it stands a chance.
|
|
|
Post by elephantrosie on Feb 17, 2019 22:40:10 GMT
Is the 12% intetest portfolio loan for SC for next tranche (ie. Releasing tomorrow)? Or does it apply for the old tranche (which was 8%)?
|
|
blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Feb 19, 2019 19:57:44 GMT
There is a company trading report button on the company overview tab. Not sure if it is new or was there before and just missed in the previous discussion. It links to a current Creditsafe report.
|
|