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Post by extremis on Mar 10, 2020 22:00:51 GMT
If you look at the statistics page the average investment is €4,255. So the total invested is around €1.2 Billion based on those figures
That would be my guess too. However, outstanding loans according to statistics page is around €760 millions, where are the rest €440 millions? It could be the total uninvested money in bank accounts, but then, again, Martins said in a recent interview that total uninvested sum is just €27-30 millions. Am i missing something?
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Post by extremis on Jan 23, 2020 23:19:41 GMT
Not only they buy them back shortly after they are sold on PM, but loans also stay in Pending Payment status (i.e. no interest rate) for several days. I think this could be an abuse of their buyback rights/pending payment status, as i cannot possibly imagine another reason for that. If they wanted to test the market they should at least return the money immediately. They were one of my favorite Loan Originators, but with this "smart" behavior i am not sure anymore.
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Post by extremis on Dec 15, 2019 13:42:45 GMT
I experienced the same a few days ago. I suspect it might has something to do with pending payments recently introduced, but i will watch it to see if it gets lower when pending payments increase.
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Post by extremis on Dec 8, 2019 20:41:47 GMT
IuteCredit and Monego license has recently been revoked in Kosovo, and Mintos has, once again, suspended loans from Secondary Market. As usual, some investors were informed about the problem (from another forum, social media, or the web) a few hours before the SM suspension and had plenty of time to sell everything (at par or very small discount) to other investors' AutoInvest profiles that happily grabbed them. Then suspension happens and nobody can sell a loan on SM anymore, even at a huge discount.
As a matter of fact, Mintos has recently changed their TOS (and informed us through email about the changes), adding a clause that grants them the right to suspend SM whenever they think appropriate in order to protect the platform and/or investors. However, no clear explanation is offered for their decision to suspend SM or not. For example, in case of Metrokredit's license problem there was no SM suspension; how is Metrokredit's case different from Iutecredit and Monego license problems?
If Mintos wants to protect investors, it is not necessary to suspend all trading on SM; they could just block Invest & Access and AutoInvest from automatically buying loans on SM while still letting manually investing. They could also add a warning flag on each affected loan, so everyone (manually) investing would be aware of the potential problem and make an informed decision whether to invest or not. Also, it makes no sense (and it is largely unfair) to block SM trading after a mass sell has already happened; Mintos has a rather big team of professionals, they should learn about potential problems before anyone else and take immediate action (or take no action at all if they choose to). (If legally possible) they could even reverse transactions on SM that happened after the bad news about a Loan Originator were publicly available.
What is your opinion on SM suspension? Are you satisfied with Mintos' reaction in case of problems, or would you prefer a different course of action?
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Post by extremis on Nov 17, 2019 22:01:01 GMT
Aforti has prematurely bought back O6 series bonds. So, they actually have cash to buy back bonds with maturity date 14.06.2021, but no cash to buy back loans that are 60+ days late on Mintos platform (88% of outstanding loans). As far as i understand buyback guarantee is an obligation of loan originators (in this case Aforti Holding SA's obligation that provides a group buyback guarantee), yet Aforti seems reluctant to honor it and Mintos seems reluctant to force them do it. Aforti group's equity is just 1.1M EUR, so right now they probably cannot cover all loans that are 60+ days late on Mintos along with the settlements made until August 8th, (and also Viventor's late loans and who knows what else). Therefore, up until now, Mintos' course of action (or lack of it) is understandable and justifiable: if they press Aforti to honor their buyback guarantee they will probably default, in which case we all loose. On the other hand, if Mintos lets Aforti use whatever cash they may still have to buyback bonds that are due somewhere in 2021, then they might default anyway with nothing left to compensate other creditors (e.g. Mintos' investors).
Why would a company in financial difficulty choose to prematurely buy back their lowest interest rate part of debt (O6 series bonds have 7% coupon rate) and not the part of debt with the highest interest rate (Aforti loans on Mintos have 11.1% average interest rate)? It doesn't make any sense to me. Unless of course they don't plan to buyback 60+ days late loans on Mintos platform at all. Any ideas?
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Post by extremis on Sept 29, 2019 16:46:50 GMT
I might be naive, but when I invest 20 EUR into a 30 days loan which says 10%, then I expect to get 22 EUR back once that loan matures. But I do not observe this for the ones finished prematurely, as well as the ones which are just "finished" and I get only a few cents back. Is my thinking/observation wrong and if so, why? Quoted interest rates are actually annual percentage rates, therefore to get 22 EUR back from 20 EUR invested in a 10% loan you should hold it for a whole year. For 1 month loans you should expect 20*0.1/12=0.17 EUR interest along with the principal 20 EUR repayment. For loans finished prematurely, the interest should be even less, e.g. for a loan repaid/bought back after just 10 days, you should expect 20*0.1*10/360=0.06 EUR interest. You can check again to see if that makes more sense now.
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Post by extremis on Sept 28, 2019 14:00:10 GMT
Not sure I fully understood the update Me either. Aforti's outstanding loan amount has not changed for about a month now. Currently, there are no current/grace period loans; outstanding loans are steadily shifting to the 60+ days status. At the very best scenario, this is a liquidity problem: Aforti has to redeem bond series N39-N43 until October, 14. Maybe they are trying to gain some time gathering any borrower repayments for bond redemption (despite Mintos clearly saying the opposite), and (hopefully) after mid October will REALLY resume payments to Mintos platform. But if outstanding loan amount stays the same after another month has passed, then i don't think we will ever get anything back from them.
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Post by extremis on Sept 25, 2019 14:54:35 GMT
60+ days Aforti loans are not bought back. Outstanding loans are at 2.2M for weeks now, it seems Aforti doesn't make any payments despite the technical issue was 'solved' 1.5 month ago. What is going on? Anyone received any payment from Aforti lately?
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Post by extremis on Sept 16, 2019 23:06:45 GMT
Loan originators can issue bonds to raise their capital at a significantly lower percent than on Mintos. Why put up loans for 14-16% on Mintos, if you can issue bonds for under 10%? Well, there are a few reasons for that: diversification of funds is one reason and also bond financing is not as flexible as financing through a platform like Mintos. LOs must pay bond rates for the full bond amount whether this is lent to borrowers or not, while financing through Mintos occurs only when needed. Actually, there are very few LOs that can issue bonds for under 10%. Most of them are so small with virtually non-existent trading histories and/or even negative equities, that would be impossible for them to get financing through bonds even at 14-16% rates. So platforms like Mintos are their only chance to get financing and expand their businesses. We (investors) are lending them money at very low rates (especially nowadays that rates have plunged) for the risk taken.
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Post by extremis on Sept 13, 2019 19:32:49 GMT
Some speculate the low rates are a seasonal thing. I doubt it. These are the inevtable effects of the negative interest rate in Europe. Those are with us for a while yet. Well, negative interest rates were already in place back on July, when we could easily find plenty of 16% interest rate opportunities on Mintos marketplace. Interest rates in Europe have not significantly changed in the last couple of months to account for the dramatic change in rates on Mintos. Available loans on PM has fallen 10 times (from 500k to 50k) in these 2 months, this has nothing to do with European rates too. It is obviously a supply and demand thing, and i expect supply to rise again shortly before Christmas time along with interest rates. However, i am not so sure rates will (ever?) go up as high as before depending on I&A success (as already mentioned). After all, if everyone decides to put his/her money in I&A and accept whatever interest rate there is available from whomever, then why should LOs offer us higher rates? But maybe newcomers (that are the main I&A users) will get more seasoned (e.g. understand that buyback guarantee is nowhere near the safety offered by banks' compensation schemes) with time and resort to Autoinvest like most of us do anyway, so the effect will be minimal. Only time will tell.
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Post by extremis on Aug 14, 2019 22:50:28 GMT
Well, "both" means that the loan originator is placing on Mintos marketplace some loans under direct structure, while others under indirect (indicated by a small i-icon next to the loan originator and borrower details).
Now, regarding the benefits of diversification in case of indirect structure, i think it makes absolutely no difference if the loan originator defaults. However, it might still be better to diversify in different loans in order to avoid everything being bought back early (in case the loan becomes 60+ days late or if the loan originator exercises its buyback rights). And with many loans with different payment schedules, one gets frequent payments instead of one big payment each month, so maybe the money can be better re-invested. Other than that, i cannot see any significant benefit.
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Post by extremis on Aug 9, 2019 23:19:09 GMT
Here is the Mintos update on the developments regarding Aforti Finance: blog.mintos.com/update-on-the-developments-regarding-aforti-finance/Absolutely no information is offered about the problem. Exactly what is the current financial state of Aforti? Is it a technical or liquidity problem? Is there any suspicion of fraud? What is the estimated time that the problem will be resolved? I really hope i am proven wrong, but given the complete lack of information, i can only assume the worst: Aforti is the new Eurocent and we will all sit here waiting for years to get our money back...
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Post by extremis on Aug 8, 2019 22:43:21 GMT
I suppose the meeting is over by now, anyone has any news?
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Post by extremis on Aug 8, 2019 14:01:43 GMT
Apparently, p2p lending business is seasonal: loan supply usually increases just before holidays as people take loans for vacations, gifts, etc. and goes down immediately after that (people are too much indebted to take new loans). Therefore, number of loans is usually high on June-July (summer vacations) and December (Christmas) driving the interest rates up as demand remains relatively stable throughout the year. On August, January-February, loan supply is usually (very) low driving interest rates down. As I&A rate is very close to average interest rate on Mintos platform, it is expected to seasonally fluctuate too. Don't worry, rates will probably go up again after summertime.
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Post by extremis on Aug 8, 2019 0:10:55 GMT
Debt to equity ratio is actually closer to 13 and quickly increasing; however debt is still covered by short term assets. They have issued bonds with 7-8% interest rates and the loans offered at Mintos/Viventor platforms are 12% interest rate max. APR is usually ~70% so there is a good margin to cover for any loan defaults. But have they published average loan default rates?
Also, their stock price has nearly tripled in 1 year, how is this possible for a company with financial difficulties? Or is it market manipulation? 96% of shares belong to individual insiders and only 4% to general public. And how about the bond rates? Sure, 7-8% rates are in the junk territory, but they are still low (the lowest?) compared with those from other Loan Originators. For comparison, Mogo, an A-rated company which also happens to be the largest by volume loan originator on Mintos, has issued bonds with 9.5-10% rates. And Banknote/Vizia (SiaExpressCredit), rated at A- by Mintos, has issued bonds with 15% interest rate. Most of the other loan originators have been established only recently, are not listed in any stock exchange and/or have not issued any bonds yet (because they couldn't?). On the other hand, Mintos had recently down-rated Aforti to C+, do they have information the markets don't have?
Aforti was one of my favorite loan originators (well, i like to invest in business loans and there are not so many with buyback guarantees available on Mintos platform) and one that i also considered underestimated and somehow lower risk than average. This time it looks like Aforti's downgrading was well justified, but will that be always the case? Are we really safe (or safer) by investing only in A-B rated companies? I am not so sure about it. Anyway, let's hope it will all end up well for everyone that has invested in Aforti's loans.
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