theshape
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Post by theshape on Jul 16, 2017 15:48:37 GMT
Recent events at Collateral have prompted me to look again at my loan allocations, specifically car loans.
V****** S**** is my largest loan on any platform, I have nothing invested in ACI 1Ltd (although I do have some investment in the Baskets of Secured loans).
I'm thinking that a loan to VS carries greater risk as it is a single trading company rather than the ACI 1 loan which itself invests in a diverse portfolio of car dealerships. Am I reading the relative risks correctly?
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elliotn
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Post by elliotn on Jul 17, 2017 2:48:08 GMT
You could probably have got away with a single thread with your two related car questions.
Possibly ac1 could be perceived as less risky as any single dealer defaulting should be a smaller % of the loan stock secured against rather than an individual company going under where it would be 100%. It has been trading longer and reserves have built up in the spv.
ACF also provide a credit guarantee for the their car loans (there's a connection to vsl too, read the docs). There was a detailed discussion on here about what happens to that guarantee spread across so many loans if ACF/APF went under. There would also be cars scattered around 100+ dealers being sold out/swapped in which may make recovering security more problematic.
Lender diversification is normally the basic rule of thumb ie by borrower/asset type/location/platform/your own materiality levels etc.
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theshape
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Post by theshape on Jul 17, 2017 21:36:36 GMT
You could probably have got away with a single thread with your two related car questions. Possibly ac1 could be perceived as less risky as any single dealer defaulting should be a smaller % of the loan stock secured against rather than an individual company going under where it would be 100%. It has been trading longer and reserves have built up in the spv. ACF also provide a credit guarantee for the their car loans (there's a connection to vsl too, read the docs). There was a detailed discussion on here about what happens to that guarantee spread across so many loans if ACF/APF went under. There would also be cars scattered around 100+ dealers being sold out/swapped in which may make recovering security more problematic. Lender diversification is normally the basic rule of thumb ie by borrower/asset type/location/platform/your own materiality levels etc. Probably, I was trying to think of my two questions separately. Thanks for the reply, I'll seek out the relevant thread.
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elliotn
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Post by elliotn on Jul 18, 2017 2:58:47 GMT
You could probably have got away with a single thread with your two related car questions. Possibly ac1 could be perceived as less risky as any single dealer defaulting should be a smaller % of the loan stock secured against rather than an individual company going under where it would be 100%. It has been trading longer and reserves have built up in the spv. ACF also provide a credit guarantee for the their car loans (there's a connection to vsl too, read the docs). There was a detailed discussion on here about what happens to that guarantee spread across so many loans if ACF/APF went under. There would also be cars scattered around 100+ dealers being sold out/swapped in which may make recovering security more problematic. Lender diversification is normally the basic rule of thumb ie by borrower/asset type/location/platform/your own materiality levels etc. Probably, I was trying to think of my two questions separately. Thanks for the reply, I'll seek out the relevant thread. Good discussion about this loan's connection to acf on 13/3/17 on the vsl thread, will add the other around acf specifically if I find it. Edit - good discussion of acf/apf from sg 02/06/17 on 1000074 thread (sorry for lack of links, not on pc).
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