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Post by p2plender on Sept 21, 2015 9:21:19 GMT
All of a sudden this morning...
Rate *******On Offer**** Orders***** Cumulative
3.1%*** £1,834,701.79**** 476***** £1,834,701.79
476 orders..
476 £4000 1 month loans?
Just interested as to what these offers are about.
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Post by fiatlender on Sept 21, 2015 10:31:26 GMT
This is money left over from the overnight payment run.
Yesterdays MR was 3.1%, thus the reason it is all sitting there at that rate.
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Post by p2plender on Sept 21, 2015 10:43:50 GMT
It's borrowers looking for a deal though.
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Post by fiatlender on Sept 21, 2015 11:37:24 GMT
Although I have only seen RS from the lender side, I assume this is borrower money asking to be refilled at the MR.
As some lenders will have pulled money to their holding account and some asked for better rates overnight, as well as some likely being pushed into other markets, we are left with this borrower money on the market.
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Post by p2plender on Sept 21, 2015 13:22:32 GMT
Well looks like the borrower decided to hoover up what was on the offer side and took pretty much all up to 4% inc my large wedge :-))
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Post by accumul8 on Sept 21, 2015 17:00:18 GMT
Mine just got hoovered up at 4.6%!
As I understand it, the monthly market is an artificial market created by RS - there are no actual borrowers bidding to borrow money for 1 month. The monthly market comprises loans with 2 years or less to run that RS finance from the monthly market by rolling over each month. Occasionally RS has a liquidity crunch and has to bid up rates to quite high levels in order to roll over maturing 1 month amounts. You should be aware that if they have a really severe liquidity crunch then RS reserves the right to freeze your monthly account for up to 2 years.
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Post by p2plender on Sept 21, 2015 17:16:38 GMT
"You should be aware that if they have a really severe liquidity crunch then RS reserves the right to freeze your monthly account for up to 2 years"
eh?
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Post by accumul8 on Sept 21, 2015 18:26:38 GMT
"You should be aware that if they have a really severe liquidity crunch then RS reserves the right to freeze your monthly account for up to 2 years" eh? See the legal section of FAQ : " What happens if there are insufficient funds to finance existing loan contracts?
If a situation occurred where there are insufficient funds on the market to finance existing loans, the Lender would be 'locked-in' to the contract until the Borrower had repaid their loan. This situation has never occurred before, nor do we envisage it happening in the future, but we feel it is necessary to clarify the procedure should this scenario arise. If your loan contract is locked in for a longer term, the entire contract rate would be at the rate of the original contract. So if you had a 1 month loan at 3.5% which was locked in for 12 months, the entire contract rate would remain at 3.5%." There is also a thread on this forum discussing the impact of an illiquidity event which might be triggered by a Northern Rock style run. Of course, this is very unlikely to occur ...
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Post by westonkevRS on Sept 21, 2015 19:26:21 GMT
Mine just got hoovered up at 4.6%! As I understand it, the monthly market is an artificial market created by RS - there are no actual borrowers bidding to borrow money for 1 month. The monthly market comprises loans with 2 years or less to run that RS finance from the monthly market by rolling over each month. Not completely true. New loans are financed in the same way from monthly money market in the same way as loans sourced from the 5-year. Again the market determines what the eventual APR for the borrower will be. westonkevRS
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am
Posts: 1,495 
Likes: 601
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Post by am on Sept 21, 2015 20:18:41 GMT
Mine just got hoovered up at 4.6%! So it seems I was too conservative setting the reinvestment rate to 3.6% last night.
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Post by accumul8 on Sept 22, 2015 10:00:32 GMT
Mine just got hoovered up at 4.6%! As I understand it, the monthly market is an artificial market created by RS - there are no actual borrowers bidding to borrow money for 1 month. The monthly market comprises loans with 2 years or less to run that RS finance from the monthly market by rolling over each month. Not completely true. New loans are financed in the same way from monthly money market in the same way as loans sourced from the 5-year. Again the market determines what the eventual APR for the borrower will be. westonkevRSSo are you saying that there are borrowers who just borrow for 1 month? Or are you saying that there are 5 year borrowers who choose to finance their 5 year loan on a monthly basis in the 1 month market? In which case, if there is an extreme liquidity crunch, a lender could be locked in for 5 year period if you were unlucky enough to have lent for a month to someone with a 5 year loan.
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Post by p2plender on Sept 22, 2015 10:14:42 GMT
might have to form an orderly northern rock type queue then. What about the PF? Wouldn't that come into play?
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Post by fiatlender on Sept 22, 2015 11:52:17 GMT
So are you saying that there are borrowers who just borrow for 1 month? Or are you saying that there are 5 year borrowers who choose to finance their 5 year loan on a monthly basis in the 1 month market? In which case, if there is an extreme liquidity crunch, a lender could be locked in for 5 year period if you were unlucky enough to have lent for a month to someone with a 5 year loan. I think if the term is less that 1 year, then this money is borrowed on the monthly. Edit: Minimum term of 6 months.
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Post by westonkevRS on Sept 22, 2015 12:15:42 GMT
Not completely true. New loans are financed in the same way from monthly money market in the same way as loans sourced from the 5-year. Again the market determines what the eventual APR for the borrower will be. westonkevRSSo are you saying that there are borrowers who just borrow for 1 month? No, I'm saying that much of the monthly market is simply rolling over and therefore isn't as true a market as per the 5-yr market. But for new 1 and 2 year loans this is sourced (from the monthly) very similarly as other term loans. So more 2 year demand will push up rates and vice versa. So the market dynamics remain the same across all the products. westonkevRS
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Post by accumul8 on Sept 22, 2015 16:22:47 GMT
No, I'm saying that much of the monthly market is simply rolling over and therefore isn't as true a market as per the 5-yr market. But for new 1 and 2 year loans this is sourced (from the monthly) very similarly as other term loans. So more 2 year demand will push up rates and vice versa. So the market dynamics remain the same across all the products. westonkevRSSo if I am a borrower of a 2 year loan, do I bid a fixed interest rate for the 2 years which is then sourced for the 1st month from the monthly market or is my loan a variable rate loan that I have to rebid each month in the monthly market?
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