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Post by Badly Drawn Stickman on Nov 5, 2018 19:43:19 GMT
I wonder if Ablrate are underwriting themselves and are just taking a smaller fee on the remaining loan parts to get them off the books. They'd still turn a profit at these levels I'm pretty sure it would be illegal for them to release negative information about a loan, then buy it up at a deep discount from panicking investors while being in possession of information not in the public domain. I think you may have misinterpreted the gustapher post. I'm sure they will confirm one way or the other. I would be interested in hearing ablrate give some context to what seems curious pricing.
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mason
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Post by mason on Nov 5, 2018 19:55:24 GMT
I'm pretty sure it would be illegal for them to release negative information about a loan, then buy it up at a deep discount from panicking investors while being in possession of information not in the public domain. I think you may have misinterpreted the gustapher post. I'm sure they will confirm one way or the other. I would be interested in hearing ablrate give some context to what seems curious pricing. Oh, are we just talking about the new loans? I think I was just thrown off the scent by the previous comment about "offers are shifting" - in fact, I still don't think I can connect the dots between these sentences.
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gustapher
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Post by gustapher on Nov 5, 2018 20:03:46 GMT
I think you may have misinterpreted the gustapher post. I'm sure they will confirm one way or the other. I would be interested in hearing ablrate give some context to what seems curious pricing. Oh, are we just talking about the new loans? Yeah sorry was just talking about the very recent ones that didn't fill. It was just idle speculation about who keeps releasing the new chunks at such big discounts. RE "Offers are shifting" I just mean of the 5 figure chunks that keep getting released they are being bought at a reasonable pace (so they are shifting/selling), but then more hits the SM soon after. 5K of 113 has gone in last few hours for example.
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mason
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Post by mason on Nov 5, 2018 20:05:41 GMT
Oh, are we just talking about the new loans? Yeah sorry was just talking about the very recent ones that didn't fill. It was just idle speculation about who keeps releasing the new chunks at such big discounts. Oh, I see, you are speculating Ablrate might be selling them off, rather than buying them up.
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gustapher
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Post by gustapher on Nov 5, 2018 20:07:34 GMT
Yeah sorry was just talking about the very recent ones that didn't fill. It was just idle speculation about who keeps releasing the new chunks at such big discounts. Oh, I see, you are speculating Ablrate might be selling them off, rather than buying them up. Yeah exactly - as opposed to a separate underwriter as speculated elsewhere.
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mason
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Post by mason on Nov 5, 2018 20:21:53 GMT
Oh, I see, you are speculating Ablrate might be selling them off, rather than buying them up. Yeah exactly - as opposed to a separate underwriter as speculated elsewhere. My understanding is that the FCA is not keen on that and several platforms have apparently had to curtail this kind of exposure. Though it seems more likely than any external underwriter being given the equivalent to 5% cashback that they could break even on the deal.
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blender
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Post by blender on Nov 5, 2018 22:03:36 GMT
I understood that Gustapher meant 113 and 114. However, I do not think we need to speculate on how the underwriters are able to afford the discounts, and certainly I do not believe that Ablrate would quietly carry these loans on the balance sheet. Taking 114, the fee is just 6.5% up front, with no monthly fee. The costs of repetition of these car loans should be low for Ablrate. Suppose they gave an underwriter 5% on half the loan (an extreme). They would still have 4% on the whole loan, or £30k. 113 is structured differently, but 3% up front and .583% pm gives plenty of scope. Until recently, the underwriter budget has been unused, and I can believe there was scope to use it on these recent loans. Pulling 115 was a good move. (I have ignored the mysteries of instant returns)
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gustapher
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Post by gustapher on Nov 6, 2018 6:26:09 GMT
Sorry all - wasn't trying to stir the pot or write anything malicious but it seems I keep digging myself further into a hole! Been really busy with work and have been checking in fairly infrequently. Just found the situation odd and was posting without giving it a great deal of thought. <Boop> <Boop> <Boop> I've reversed my truck into the darkness where I'll watch from the sidelines - carry on all.
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blender
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Post by blender on Nov 6, 2018 8:49:42 GMT
Sorry all - wasn't trying to stir the pot or write anything malicious but it seems I keep digging myself further into a hole! Been really busy with work and have been checking in fairly infrequently. Just found the situation odd and was posting without giving it a great deal of thought. <Boop> <Boop> <Boop> I've reversed my truck into the darkness where I'll watch from the sidelines - carry on all. Your posts are fine, and well within the normal boundaries of discussion. Ablrate can always make their position clear if they wish, but it's usually heads down on this subject. Just keep that truck going.
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Post by dan1 on Nov 6, 2018 9:24:49 GMT
I wonder if there's an underwriters worksheet for crunching the numbers to derive the break-even point? There are several factors at play, many of which are in common with regular "retail" investors, and I guess that elements of what follows apply across all platforms. - Underwriters discount - tax-free? - Instant Returns - tax-free - Selling on the SM at a loss - capital loss? Depends on qualification of simple debt - Accrued interest - taxable at marginal rate (45% for HNW?) - Investment through an ISA - tax-free - Investment through a Ltd company - underwriters discount, interest, Instant Returns, and capital gains taxed at 19% or 20%? - Investment through a company registered overseas - ? Selling prior to the first repayment reduces the risk of default significantly.
It's interesting to compare the monthly repayment system (ABL) with bullet repayments (FS), and I guess you could make an argument for both depending on investment vehicle and marginal tax rates of underwriters.
What have I missed?
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