jlend
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Post by jlend on Dec 13, 2017 12:52:28 GMT
Interesting. Did you ever find any wording on the website regarding the timing of interest payments from the PF? All I could find on interest payments was the above statement. Thanks No, nothing on the site. There are some comments by stuartassetzcapital on here though about the cost of running it like RS being too high and that some new wording / details on the working coming soon. Personally, such clarity would be great, ideally before the isa goes live as I want to judge how much to invest that way. Cheers and yep I agree. I guessed any capital payments would wait until a loan formally defaulted reading the wording on the website. *"Any possible capital losses if a loan defaults and the security when sold does not cover the loan balance remaining" The wording on the website infers late interest payments would be covered irrespective of any default I assumed. This makes sense as not all loans with late or missing interest payments go on to default. "*Payment delays of interest from a borrower where that sum arrives later than expected" "*Shortfalls in interest received from a borrower" I assumed from this the interest is paid from the discretionary provision fund as soon as an interest payment is late. I can't see anything that says how long the PF waits to cover interest late payments or shortfalls. It can't be too long else the payment delay statement seems pretty meaningless. Perhaps I'm just being a bit dumb 😀
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mikes1531
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Post by mikes1531 on Dec 13, 2017 16:34:31 GMT
"*Payment delays of interest from a borrower where that sum arrives later than expected" "*Shortfalls in interest received from a borrower" I assumed from this the interest is paid from the discretionary provision fund as soon as an interest payment is late. I can't see anything that says how long the PF waits to cover interest late payments or shortfalls. It can't be too long else the payment delay statement seems pretty meaningless. Perhaps I'm just being a bit dumb 😀 : IMHO you're not being dumb at all. It looks to me as if the description of how the PF would work was written by an optimistic PR person who described how it ought to work and got that approved for publication on the website by others who thought that description was reasonable. Since then, AC probably have looked at the number of late payments they're getting relative to the size of the PF pot they have and decided there wasn't enough in the PF pot to use it to make replacement payments as soon as the borrowers failed to pay. The wording on the website really does need updating if AC don't want to be accused of misleading investors and potential investors. IIRC, AC have said that the PF pot contains three times the amount they expect it to need to pay out, but they've never put that into ££££ terms. I suspect the number of pounds actually in the pot is pretty small relative to the size of the portfolio of loans held in the managed accounts that are covered by the PF.
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Post by crabbyoldgit on Dec 14, 2017 8:20:31 GMT
I wonder what a 5.9 million default would do to the PF, who knows we may start to find out later today when the latest update a little overdue is released . I hope not as I am in to my max within the mlia and if this loan goes duff it will be painful.
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trouble
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Post by trouble on Dec 14, 2017 8:40:35 GMT
I wonder what a 5.9 million default would do to the PF, who knows we may start to find out later today when the latest update a little overdue is released . I hope not as I am in to my max within the mlia and if this loan goes duff it will be painful. Nothing if the discretionary PF doesn't pay out 
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ashtondav
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Post by ashtondav on Dec 14, 2017 15:16:54 GMT
The AC provision fund - an enigma wrapped within a mystery, hiding behind a curtain.
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baz657
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Post by baz657 on Dec 14, 2017 19:40:27 GMT
I wonder what a 5.9 million default would do to the PF, who knows we may start to find out later today when the latest update a little overdue is released . I hope not as I am in to my max within the mlia and if this loan goes duff it will be painful. You're forgetting that there should be some substantial scraps available and that the entire loan would not be lost so the PF wouldn't have to pay out 100% of what was borrowed. Hopefully.
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jonah
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Post by jonah on Dec 15, 2017 9:50:33 GMT
I wonder what a 5.9 million default would do to the PF, who knows we may start to find out later today when the latest update a little overdue is released . I hope not as I am in to my max within the mlia and if this loan goes duff it will be painful. You're forgetting that there should be some substantial scraps available and that the entire loan would not be lost so the PF wouldn't have to pay out 100% of what was borrowed. Hopefully. And that chunks of it will be in mlia which isn’t covered. And that for some time, the PF will have gained 5.25% return being added in from the delta of the headline rate and GBBA rate. And the LTV on the security isn’t too low. And a theoretical sizeable personal guarantee. I’m not yet losing sleep over this one, despite it being my largest GBBA holding.
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mikes1531
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Post by mikes1531 on Dec 17, 2017 23:37:18 GMT
And that for some time, the PF will have gained 5.25% return being added in from the delta of the headline rate and GBBA rate. Except, AIUI, that differential goes to the AC bottom line rather than the PF since, IIRC, AC have stated that the PF has been funded to its appropriate level already.
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Post by chris on Dec 18, 2017 5:02:39 GMT
And that for some time, the PF will have gained 5.25% return being added in from the delta of the headline rate and GBBA rate. Except, AIUI, that differential goes to the AC bottom line rather than the PF since, IIRC, AC have stated that the PF has been funded to its appropriate level already. I haven't been able to attend the last couple of board meetings but AIUI that hasn't happened for a long time, due to account growth we've been letting the PF grow alongside it.
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dandy
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Post by dandy on Jan 14, 2018 10:50:07 GMT
Does anyone know where we can see how much is in AC provision fund? Can't seem to find any details at all other than a very old stress test. Or is this information not provided?
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jonah
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Post by jonah on Jan 14, 2018 14:02:34 GMT
Does anyone know where we can see how much is in AC provision fund? Can't seem to find any details at all other than a very old stress test. Or is this information not provided? Beyond the 3x stress test results stuff which I assume you have found, there aren't any figures available at this point in time.
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teddy
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Post by teddy on Jan 17, 2018 17:36:58 GMT
As far as the £8K I've got in massively over lent to, long term bad loans in the GBBA and GEA, the AC provision fund continues to be a mythical creature that no one at AC will actually admit exists or will ever be used to refund lenders.
Christ, I wish I'd stayed in Ratesetter. I really do.
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Post by stuartassetzcapital on Jan 19, 2018 9:52:54 GMT
Hi, we have around £2.5m in the provision fund at present and all held in cash. The default/ losses page gives the coverage ratios for each account that has PF coverage and by that we mean we calculate and display how many times over the PF cash balance for that account covers all known (estimated) losses from any defaulted loans and the statistical expected loss for all the remaining non-defaulted loans within that account. This indicates more than full coverage. I hope that helps. As I have said before we are also fixing the PF being able to pay out interest on late paying loans and I apologise for the delay but it is imminent I understand.
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ashtondav
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Post by ashtondav on Jan 19, 2018 11:54:05 GMT
Good! Because it ain’t difficult having a well funded PF which never pays out. I’m amazed your "black box accounts" business model has lasted this long
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dandy
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Post by dandy on Jan 19, 2018 12:22:30 GMT
Good! Because it ain’t difficult having a well funded PF which never pays out. I’m amazed your "black box accounts" business model has lasted this long I think saying £2.5m is well funded is a bit of a stretch. How much does it cover? About £150m? With individual loans more than double the entire PF? Hmmm. Not for me.
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