wapping35
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Post by wapping35 on May 13, 2020 16:49:27 GMT
Ho hum.. Well I am glad I clarified RS first response earlier today
I have pasted below the first response and the new one (which 100% reverses what RS stated initially).
Not that communicating the position of liquidity and coverage ratio is important of course..
Email at 10.49 am today. ================= Good Morning xxxx,
Thank you for your email.
We do apologise for the delay in our response. The coverage ratio of 74% reflects the £4.65m raised from the debt sale. The debt sale is a positive development as it brought forward money that was expected to be recovered over time from non-performing loans into a cash payment into the Provision Fund. Broadly, the movements from the debt sale have increased the Provision Fund cash, and reduced the Expected Future Inflows, along with increasing the Expected Future Losses.
If you have any further questions please do not hesitate to contact us.
Kind Regards xxx
RateSetter Customer Service
=======================
New email after my are you sure about that email..evidentally CS escalated the question.
2.13pm... =========== Good afternoon XXX,
Thank you for your email which I have taken over from XXX, to provide you with some clarity.
To be clear, the provision fund cash balance does not include the £4.65m raised from the debt sale, as this amount was received in April and the figures show the position in March . Therefore, the coverage ratio will not reflect any net positive impacts as of yet. This will be reflected in the update at the end of May.
This has been calculated by the Credit & Risk team and we expect this will have a positive affect of a few percentage points on the coverage ratio. Again, this will be included in the updated coverage ratio at the end of May.
Apologies for any misunderstanding.
Kind Regards YYYY - Investor Services Team Leader
RateSetter Customer Service
===========
I am a tad shocked they could get this wrong, but I guess it now is moderately good news as opposed to terrible news which the first RS reply indicated.
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beagle
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Post by beagle on May 13, 2020 16:53:17 GMT
I think that's about the size of it. It's a bleak picture, but doesn't seem an unrealistic one in the circumstances, unfortunately. Yep it could well be correct, but if it is to me at least it begs the question why did RS not impose the hair cut sooner. i.e. April 1 not May 4th. If so no doubt the May 1st numbers will be delayed (into June) like the April 1 ones were, if they need to think about an additional hair cut above 50%. But for now I will await RS's response to my email. I have to say, that would be bleak but this is purely theory of course. Their data does not reflect the debt sale as it runs to March and that took place in April so we should see it this month. I would also argue that if that was the case a loss of 5 - 6 million they would be doing more than 50% as it would mean in 4 weeks there is no PF. So with due respect i think this is wrong, the hair cut started later as they probably used time to consider the situation. Let's bear in mind these loans wouldnt default the next day and so i doubt the fund lost 5 million, it takes months for this to filter through. The risk is what is to come, which is why i think they waited.
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wapping35
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Post by wapping35 on May 13, 2020 17:13:20 GMT
I have to say, that would be bleak but this is purely theory of course. Their data does not reflect the debt sale as it runs to March and that took place in April so we should see it this month. I would also argue that if that was the case a loss of 5 - 6 million they would be doing more than 50% as it would mean in 4 weeks there is no PF. So with due respect i think this is wrong, the hair cut started later as they probably used time to consider the situation. Let's bear in mind these loans wouldnt default the next day and so i doubt the fund lost 5 million, it takes months for this to filter through. The risk is what is to come, which is why i think they waited. Indeed it is wrong but that is because RateSetter made an error as per my post above. They are the ones that said the £4.65m was in the 74% coverage ratio as at April 1, 2020 they have now retracted that.
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r00lish67
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Post by r00lish67 on May 13, 2020 17:24:03 GMT
Ho hum.. Well I am glad I clarified RS first response earlier today I have pasted below the first response and the new one (which 100% reverses what RS stated initially). Not that communicating the position of liquidity and coverage ratio is important of course.. <snip> New email after my are you sure about that email..evidentally CS escalated the question. 2.13pm... =========== Good afternoon XXX, Thank you for your email which I have taken over from XXX, to provide you with some clarity. To be clear, the provision fund cash balance does not include the £4.65m raised from the debt sale, as this amount was received in April and the figures show the position in March . Therefore, the coverage ratio will not reflect any net positive impacts as of yet. This will be reflected in the update at the end of May. This has been calculated by the Credit & Risk team and we expect this will have a positive affect of a few percentage points on the coverage ratio. Again, this will be included in the updated coverage ratio at the end of May. Apologies for any misunderstanding. =========== I am a tad shocked they could get this wrong, but I guess it now is moderately good news as opposed to terrible news which the first RS reply indicated. I'm rather surprised by that I have to say. If that is the case, I have to question how PF cash only fell from £6.9m to £5.8m from Mar to Apr 2020. By comparison, from Feb-> Mar it fell by £1.3m and that would have had almost zero COVID-19 related impact in all likelihood. It has also fallen by similar amounts in the recent months preceding that. Are they really saying that March 2020 was a better month for them than February 2020 and previous in terms of call on the PF? I mean, if true, great, but really? Am I missing something else? Also, second unrelated point - if, AIUI, the debt sale achieved no more or less than was expected, and the numerator of the ICR is 'PF cash + inflows', how would the debt sale improve the coverage ratio? It should improve liquidity, but the equation seems the same.. edit: looking back, some uncertainty where the debt sale would fall as their email (on Weds 8th April) stated it was completed "last week", which could be anywhere from Mon 30th March to 3rd April. So we just have to trust/distrust CS I suppose..
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beagle
Investor in ratesetter, funding circle, lendy (lesson learnt) and AC
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Post by beagle on May 13, 2020 17:31:43 GMT
it might be that the crisis started in mid March and so it didn't take full effect. moreover on day one not everyone would default it takes time. Ratesetter may well have been doing better before covid... we don't know but covid will not impact on day one. it takes times to filter. the real risk when payment holidays start as that is unsustainable
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r00lish67
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Post by r00lish67 on May 13, 2020 17:34:51 GMT
it might be that the crisis started in mid March and so it didn't take full effect. moreover on day one not everyone would default it takes time. Ratesetter may well have been doing better before covid... we don't know but covid will not impact on day one. it takes times to filter. the real risk when payment holidays start as that is unsustainable I guess so....has to be the case really if CS are right this time.
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wapping35
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Post by wapping35 on May 13, 2020 17:46:15 GMT
On the coverage ratio they are saying the debt sale improves it because the debt was sold at a small premium to the value they held them as a non cash asset receivable on the PF accounts...
So just for example (pretend numbers) the cash sale was £4.65m but the value in the PF future income (projected receivable for the debt sale) was £4m, so that would be a £0.65m improvement to the coverage ratio or approx 2%...
I have asked RS(in reply to the corrected email which they sent to me afternoon) that they isolate the impact on the May 1 update at the end of this month.
All in I feel the clarity would help RS as well as investors..
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r00lish67
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Post by r00lish67 on May 13, 2020 17:48:00 GMT
On the coverage ratio they are saying the debt sale improves it because the debt was sold at a small premium to the value they held them as a non cash asset receivable on the PF accounts... So just for example (pretend numbers) the cash sale was £4.65m but the value in the PF future income (projected receivable for the debt sale) was £4m, so that would be a £0.65m improvement to the coverage ratio or approx 2%... I have asked RS(in reply to the corrected email which they sent to me afternoon) that they isolate the impact on the May 1 update at the end of this month. All in I feel the clarity would help RS as well as investors.. Cool, well apologies for doubting you wapping. I guess we wait with baited bated breath to see what May's stats for April hold.. *Bated, not baited. Gah. Not a good day!
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beagle
Investor in ratesetter, funding circle, lendy (lesson learnt) and AC
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Post by beagle on May 13, 2020 17:49:29 GMT
it might be that the crisis started in mid March and so it didn't take full effect. moreover on day one not everyone would default it takes time. Ratesetter may well have been doing better before covid... we don't know but covid will not impact on day one. it takes times to filter. the real risk when payment holidays start as that is unsustainable I guess so....has to be the case really if CS are right this time. it would be bad if they were wrong, but it looks like a manager took over as it says "I have taken this over" so I would suspect it's likely right
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beagle
Investor in ratesetter, funding circle, lendy (lesson learnt) and AC
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Post by beagle on May 13, 2020 17:50:43 GMT
On the coverage ratio they are saying the debt sale improves it because the debt was sold at a small premium to the value they held them as a non cash asset receivable on the PF accounts... So just for example (pretend numbers) the cash sale was £4.65m but the value in the PF future income (projected receivable for the debt sale) was £4m, so that would be a £0.65m improvement to the coverage ratio or approx 2%... I have asked RS(in reply to the corrected email which they sent to me afternoon) that they isolate the impact on the May 1 update at the end of this month. All in I feel the clarity would help RS as well as investors.. Cool, well apologies for doubting you wapping. I guess we wait with baited breath to see what May's stats for April hold.. 2% sounds about right. it think the data will be better now too
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Post by peertopier on May 14, 2020 11:42:17 GMT
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jlend
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Post by jlend on May 14, 2020 15:21:20 GMT
On the coverage ratio they are saying the debt sale improves it because the debt was sold at a small premium to the value they held them as a non cash asset receivable on the PF accounts... So just for example (pretend numbers) the cash sale was £4.65m but the value in the PF future income (projected receivable for the debt sale) was £4m, so that would be a £0.65m improvement to the coverage ratio or approx 2%... I have asked RS(in reply to the corrected email which they sent to me afternoon) that they isolate the impact on the May 1 update at the end of this month. All in I feel the clarity would help RS as well as investors.. Worth asking when RS are going to publish the next Quarterly review of Coverage Ratios. We usually get some text to explain how the ratio has changed. From the RS notices it looks like the last one was Q4 2019 on 23rd Jan 2020 unless I have missed things. The Q1 2020 review won't be that useful but the Q2 one will be more interesting.
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beagle
Investor in ratesetter, funding circle, lendy (lesson learnt) and AC
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Post by beagle on May 14, 2020 21:56:29 GMT
if you want clarity just give them a call. they always help me and even now they are fast and friendly. not always want to hear but it's direct from them.... no where else
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beagle
Investor in ratesetter, funding circle, lendy (lesson learnt) and AC
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Post by beagle on May 26, 2020 23:42:24 GMT
RateSetter are you going to update the data page on time? last month it was late and we all deserve to get up to date data if we are passing 50% interest to the fund. you do a great job and it's showing but do please make sure your data is on time. otherwise don't wonder why people get mad with you
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aju
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Post by aju on May 28, 2020 15:19:46 GMT
RateSetter are you going to update the data page on time? last month it was late and we all deserve to get up to date data if we are passing 50% interest to the fund. you do a great job and it's showing but do please make sure your data is on time. otherwise don't wonder why people get mad with you I'm not sure RS answers direct questions on here they usually only use this location to make statements regarding the PF and more recently the daily sales volumes etc. Sometime they may answer but you would be better asking this directly by eMail or better phone them. They have until Monday I guess but correct me if i'm wrong wasn't there an adjustment last month to factor in the rate changes that affected the PF percentages and it may have been delayed due to those decisions perhaps.
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