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Post by GSV3MIaC on Dec 7, 2018 17:02:56 GMT
For some reason, on my tablet (firefox) i am getting a 'download.file.aspx cannot be opened' error, for this, and other ablrate documents. Is it just me .. have i got my pdf option messed up (although other pdfs seem ok).
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Post by ablrate on Dec 7, 2018 17:08:46 GMT
@butchcassidy - Your loans are bilateral, you can download the documents and take your own personal action should you wish. Our default position is to preserve capital of lenders and that is what we have done while maintaining a level of interest. The analysis of the business after the B********* administration was such that the reduced rate would allow the best chance of capital preservation. Our fees have been cut by 90% to increase returns to lenders and there has been no debt forgiveness, the original loan was £600,000 which had amortised to £442,000. The risk profile (i.e amortisation vs bullet) has change but the real yield is roughly the same i.e circa 8% to term. blender - the business is seeking equity investment to pay down the loan or an outright sale of the business and we will be monitoring progress to that. The other loans are also being completed for restructuring, but we are working through each one methodically and should have updates soon. We looked at immediate liquidation and this was the best option for lenders. @butchcassidy - the bilateral nature of loans requires that one lenders' decision cannot impact another's hence we don't do votes. The loans are effectively relisted for subscription by having the ability to sell your loans on the secondary market. ..and you lose nothing by listing all of your loans for sale at whatever price you are happy to sell at. You still receive interest and nothing changes... but your loans are there to be hit. @butchcassidy - again the real rate - i.e the yield on your capital would be roughly the same to term. In amortising loans you are receiving 14% on a reducing amount of capital so the real rate is lower although we do appreciate that the risk profile has changed
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nyneil
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Post by nyneil on Dec 7, 2018 17:27:23 GMT
@butchcassidy - Your loans are bilateral, you can download the documents and take your own personal action should you wish. Our default position is to preserve capital of lenders and that is what we have done while maintaining a level of interest. The analysis of the business after the B********* administration was such that the reduced rate would allow the best chance of capital preservation. Our fees have been cut by 90% to increase returns to lenders and there has been no debt forgiveness, the original loan was £600,000 which had amortised to £442,000. The risk profile (i.e amortisation vs bullet) has change but the real yield is roughly the same i.e circa 8% to term. blender - the business is seeking equity investment to pay down the loan or an outright sale of the business and we will be monitoring progress to that. The other loans are also being completed for restructuring, but we are working through each one methodically and should have updates soon. We looked at immediate liquidation and this was the best option for lenders. ablrate did you miss out the word NOT? Or have I misunderstood what you were saying.
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SteveT
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Post by SteveT on Dec 7, 2018 17:28:03 GMT
Erm, the “real yield” argument rather glosses over the reality that most lenders reinvest their amortising capital repayments into other interest-generating loans. They don’t just hold it as cash until the loan ends!
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Post by Duane Dibley on Dec 7, 2018 17:31:48 GMT
At least Ablrate are doing something, and something is surely better than nothing.
I much prefer a platform to be proactive in their loans even if it means such changes to the interest rate or payment terms.
Better that than just letting the loan default, accepting the borrower's promises of the cheque's in the post, posting trite and meaningless updates and just generally hoofing the can as far down the road as they can whilst constantly telling anyone who'll listen that nobody has lost a penny on their platform.
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Post by Butch Cassidy on Dec 7, 2018 17:34:17 GMT
@butchcassidy - Your loans are bilateral, you can download the documents and take your own personal action should you wish. Our default position is to preserve capital of lenders and that is what we have done while maintaining a level of interest. The analysis of the business after the B********* administration was such that the reduced rate would allow the best chance of capital preservation. Our fees have been cut by 90% to increase returns to lenders and there has been no debt forgiveness, the original loan was £600,000 which had amortised to £442,000. The risk profile (i.e amortisation vs bullet) has change but the real yield is roughly the same i.e circa 8% to term. blender - the business is seeking equity investment to pay down the loan or an outright sale of the business and we will be monitoring progress to that. The other loans are also being completed for restructuring, but we are working through each one methodically and should have updates soon. We looked at immediate liquidation and this was the best option for lenders. @butchcassidy - the bilateral nature of loans requires that one lenders' decision cannot impact another's hence we don't do votes. The loans are effectively relisted for subscription by having the ability to sell your loans on the secondary market. ..and you lose nothing by listing all of your loans for sale at whatever price you are happy to sell at. You still receive interest and nothing changes... but your loans are there to be hit. @butchcassidy - again the real rate - i.e the yield on your capital would be roughly the same to term. In amortising loans you are receiving 14% on a reducing amount of capital so the real rate is lower although we do appreciate that the risk profile has changed Individual action is clearly unrealistic & not cost effective as you are obviously aware; I have no problem with using the SM, however your unilateral action of reducing the rate, from 14% to 8%, has effectively devalued the loan on the SM, currently the SM thinks it should yield 18.8-22.1% so instead of being able to sell out for approx. 5% capital loss (at 14% face value) you have increased that to at least 15% capital loss. Those holding an amortising loan have also suffered over 85% reduction in income stream & also face the increased risk of non payment of the final bullet. If this is the best you can do & I am happy to accept that it might be, why not relist it for subscription under the new terms on the platform?
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Post by ablrate on Dec 7, 2018 17:38:44 GMT
Erm, the “real yield” argument rather glosses over the reality that most lenders reinvest their amortising capital repayments into other interest-generating loans. They don’t just hold it as cash until the loan ends! Absolutely - we are not saying its ideal, but the headline of 14% reducing to 8% seems more harsh than it is. The risk profile is the issue, of course.
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Post by ablrate on Dec 7, 2018 18:01:00 GMT
@butchcassidy The loan has amortised by 27%. A sale of capital now at 85% would make capital loss at around 11%.
The structure is there to give the business the opportunity to keep trading and pay lenders back through an equity raise or sale with a view to full recovery. The security is still in place and can be triggered should the current structure not be kept to. The alternative is administration and the cost and time that takes. This way there can be an orderly and measured view taken over the coming weeks and months that maintains a yield to lenders.
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blender
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Post by blender on Dec 7, 2018 21:00:19 GMT
I do not doubt Ablrate's bona fides, but lenders seem to be in a very weak position if this is their best option, weaker than might have been expected from the security and guarantees in the proposal. I just hope that this is not a taster for similar approaches to other non-performing loans, where the security is in real trading pubs, and the link with the cos in administration is more indirect.
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Post by Badly Drawn Stickman on Dec 7, 2018 22:02:50 GMT
I do not doubt Ablrate's bona fides, but lenders seem to be in a very weak position if this is their best option, weaker than might have been expected from the security and guarantees in the proposal. I just hope that this is not a taster for similar approaches to other non-performing loans, where the security is in real trading pubs, and the link with the cos in administration is more indirect. I'm struggling a bit to be objective (having bought in at 79% and sold out at 86% - fairly trivial amount), I do however feel it is a far from calamitous outcome, given what was possible and assuming the plan works. keeping the business going and possibly saving jobs and not losing money for investors is where I want Ablrate to be positioning themselves. I accept others will have wanted funds returning regardless of wider consequences. Hopefully I still have enough 'goodness' left in me to have held the same view was I holding a large sum at par. Good to see Albrate sharing the financial 'hit' by heavily cutting platform fees to the borrower.
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blender
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Post by blender on Dec 7, 2018 23:08:35 GMT
Yes, but it is not an 'outcome'. The loan has been made much softer for two years, from 24% pa to 9.65% pa overall, and non-amortising. Ablrate had £42k up front plus about £50k in monthly payments before things went wrong; so they will be ok. But if the borrower keeps up the much smaller amount, then presumably there is nothing that Ablrate can do, except to see how much principal can be repaid at the end. That is when we will see an outcome, imo.
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Post by GSV3MIaC on Dec 8, 2018 7:38:33 GMT
Yep, the assets keep depreciating, but the outstanding capital stays the same. Hopefully we will get repaid something before the former hits zero.
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ceejay
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Post by ceejay on Dec 11, 2018 11:18:23 GMT
You can list all you like but to secure a sale you NEED A BUYER so 88-90 won't cut it, if you don't believe me try buying some, there's currently £17,351 to go at. I do understand how the SM works, which is why dropping the rate from 14% to 8% without consultation is simply not acceptable - it not only vastly reduces the pre agreed income stream (by over 85% when including bullet instead of amortising) but it totally changes any SM exit strategy for those who may need to sell. Sold a little at 88 today, having bought it at 87 a couple of days earlier. Trivial sums, but I think it shows that the market is still trying to find it's level. Given the imbalance between bids and offers, my guess is that whatever action is taking place at the moment is mostly from buyers taking offers, rather than sellers taking bids.
As ablrate has said, at 88-90% the yield to a buyer is 15-16%, which is definitely in the ballpark for a loan like this, don't you think?
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Post by Butch Cassidy on Dec 11, 2018 11:44:26 GMT
You can list all you like but to secure a sale you NEED A BUYER so 88-90 won't cut it, if you don't believe me try buying some, there's currently £17,351 to go at. I do understand how the SM works, which is why dropping the rate from 14% to 8% without consultation is simply not acceptable - it not only vastly reduces the pre agreed income stream (by over 85% when including bullet instead of amortising) but it totally changes any SM exit strategy for those who may need to sell. Sold a little at 88 today, having bought it at 87 a couple of days earlier. Trivial sums, but I think it shows that the market is still trying to find it's level. Given the imbalance between bids and offers, my guess is that whatever action is taking place at the moment is mostly from buyers taking offers, rather than sellers taking bids.
As ablrate has said, at 88-90% the yield to a buyer is 15-16%, which is definitely in the ballpark for a loan like this, don't you think?
I tend to agree but as you say selling £10 here & there is no use at all if you have a significant holding, unilaterally forcing holders to accept half the market rate that the loan actually warrants & massively increased risk of a bullet payment without any alternatives is simply not acceptable. For a supposedly strong loan that had passed all platform DD to have proved so fundamentally weak as to require such a generous reduction highlights the weakness of the asymmetric P2P risk model; where platforms take the majority of their fees upfront & then as & when any trouble occurs they simply shaft lenders with the smelly end of the stick & is a real shame as Ablrate was shaping up to be a standout platform for doing things differently. They have proved with their treatment of lenders in this case that they are no different to the FC's of this world & can not be trusted to have the interests of lenders as a priority.
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stevio
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Post by stevio on Dec 11, 2018 12:16:26 GMT
Sold a little at 88 today, having bought it at 87 a couple of days earlier. Trivial sums, but I think it shows that the market is still trying to find it's level. Given the imbalance between bids and offers, my guess is that whatever action is taking place at the moment is mostly from buyers taking offers, rather than sellers taking bids.
As ablrate has said, at 88-90% the yield to a buyer is 15-16%, which is definitely in the ballpark for a loan like this, don't you think?
I tend to agree but as you say selling £10 here & there is no use at all if you have a significant holding, unilaterally forcing holders to accept half the market rate that the loan actually warrants & massively increased risk of a bullet payment without any alternatives is simply not acceptable. For a supposedly strong loan that had passed all platform DD to have proved so fundamentally weak as to require such a generous reduction highlights the weakness of the asymmetric P2P risk model; where platforms take the majority of their fees upfront & then as & when any trouble occurs they simply shaft lenders with the smelly end of the stick & is a real shame as Ablrate was shaping up to be a standout platform for doing things differently. They have proved with their treatment of lenders in this case that they are no different to the FC's of this world & can not be trusted to have the interests of lenders as a priority. The decision was to default straight away or work out a repayment plan Bit like Brexit at the moment, "Hard brexit" or negotiate a deal, with AB being unfortunately Teresa May in this (any deal will not be liked, but that is not to say it is not better for the majority) Its hard for a platform to be a democracy - you agreed to the loan terms so you forgo any right to a democracy and elect AB to make decisions on your behalf. Dont agree in the first place if you dont like it when they do exactly what you agreed for them to do at the start of the loan If you dont want to sell at a reduced rate, then dont, no one is forcing you too and see what your return is by remaining in the loan. I suspect you dont want to wait and see and just are peeved that you have to take a loss to sell. I suspect that it is not ABs decision that you are upset with, more the reality of realising a loss here Personally, I would have liked FS to have tried to work out an option with their SM to exit early at a small loss, rather than default in all but name and string things out for 2 years+ and then still give a large loss at the end
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