IFISAcava
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Post by IFISAcava on Feb 8, 2018 15:44:41 GMT
One of the specific risks highlighted in the proposal is that the company may not be able to fulfill its grand aims (to paraphrase) should it not be able to draw down funds from the facility. Otherwise performance could be impacted. I don't know how significant those consequences could be, but seeking £5m of funding for a single company from P2P lenders at only 8% p.a. sounds a big ask to me, especially against a backdrop of apparently forthcoming rising interest rates. Archover have managed it using a similar "secured and insured" model and several tranches to the same company, but with less liquidity (no out before end of term). I'm happy to park money here whilst building up and diversifying funds within my ABL ISA and awaiting more larger interest loans to balance overall portfolio.
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Post by GSV3MIaC on Feb 8, 2018 15:45:04 GMT
/mod hat off I see 4 outstanding charges against this company (via CH, beta), one of which is of course the/an existing ABLRATE one .. however there is at least one since then .. can ablrate tell us how these 4 stack up, and where the new loan(s) will fit in the pecking order, should it become necessary to peck?? As various people have mentioned, while the borrowing company books balance, exactly, the 'end user' of the finance provided appears to be in a negative equity position (and still digging). Some explanation would be nice.
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dawn
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Post by dawn on Feb 8, 2018 15:46:18 GMT
Page 26 under credit risk (Risks specified to this loan) "The loan balance will be repaid in a single, one-off payment at the end of the loan term in months 24." This in in relation to each tranche as per the preceding paragraphs So, if I understand this correctly, this is tranche 1 and it will run for 24 months from drawdown. Tranche 2 will be launched as and when M** need more funds and it will then run for 24 months from the drawdown date of tranche 2, etc - is that right? Does that also mean no new tranches after 36 months from now - to give the final tranche 24 months in which to run? How many tranches do you think the overall loan is likely to have? All these tranches then fit within the 5 year portfolio loan - so basically a set of smaller 24 month loans wrapped up together to form one 5 year portfolio loan - have I understood this correctly? Edit - and we lend to the overall portfolio loan and it doesn't matter (and we don't know) which of the tranches underneath our money is sat in (except for now as there is only 1) - hence the spread of risk across different tranches?
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ceejay
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Post by ceejay on Feb 8, 2018 15:51:21 GMT
Not exactly flying off the shelf, this one.
I keep coming back to the security. If the borrower (SPV and/or parent) goes bust, how do their assets (Letters of Credit) get back to Lenders? Even if 100% of underlying loans got repaid, would there be enough to repay us lenders and how would that money find its way to us? The balance sheet suggests there would not be enough to repay in full.
It feels like LTV > 100% ... I'm fully prepared to accept the possibility that I've missed something, but the loan documents are not making this at all clear.
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des
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Post by des on Feb 8, 2018 15:52:08 GMT
I'm happy to park money here whilst building up and diversifying funds within my ABL ISA and awaiting more larger interest loans to balance overall portfolio. And what do you do if no-one wants to buy you out when you want to un-park?
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IFISAcava
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Post by IFISAcava on Feb 8, 2018 15:53:10 GMT
I'm happy to park money here whilst building up and diversifying funds within my ABL ISA and awaiting more larger interest loans to balance overall portfolio. And what do you do if no-one wants to buy you out when you want to un-park? take 8% tax free interest until the loan matures at 2 years
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ding
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Post by ding on Feb 8, 2018 15:55:01 GMT
I've been on the available loans page for some time. Bashing the F5 and surprised I'm still logged in. Just seen it listed on the main page. Then came straight here to see mainly negative comments. Do I even bother reading the details now...
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blender
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Post by blender on Feb 8, 2018 16:00:21 GMT
A load of confidence must be placed in the assurance by ablrate expert that this/ these loans no not constitute wholesale lending. Nothing stated about what happens when fca challenge this and the loans need to be bought out. Care to comment please ablrate? As per page 5 and page 27: "It is important to outline that this loan does not contravene the wholesale lending provisions outlined to platforms recently by the Financial Conduct Authority. Ablrate lenders have loaned £600,000 in two previous tranches both of which have performed perfectly and been paid on time. These loans were submitted to the FCA under their wholesale lending review and no action was taken. Ablrate and *** have also sought a legal opinion from a leading expert in the peer to peer lending market about the facility detailed in this document, the conclusion of which is that these loans fall outside of the wholesale lending regulations." I do not question the assurances on wholesale lending, but on the two previous tranches only the interest payments to date have been paid. The ability to repay any part of the capital has not been tested, and presumably will not be tested because we are refinancing it. The wording is not good because one could infer that the tranches have been repaid on time.
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des
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Post by des on Feb 8, 2018 16:01:43 GMT
And what do you do if no-one wants to buy you out when you want to un-park? take 8% tax free interest until the loan matures at 2 years As long as you are happy with that. Some people seem to be treating this as something other than the reduced rate, forced par SM offering that it is, and not being aware that there is no "instant access" exit pre-term. I wouldn't invest at 12% with a market based SM, so I'll certainly not be putting any of my pennies in this.
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stub8535
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personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Feb 8, 2018 16:02:17 GMT
A load of confidence must be placed in the assurance by ablrate expert that this/ these loans no not constitute wholesale lending. Nothing stated about what happens when fca challenge this and the loans need to be bought out. Care to comment please ablrate? As per page 5 and page 27: "It is important to outline that this loan does not contravene the wholesale lending provisions outlined to platforms recently by the Financial Conduct Authority. Ablrate lenders have loaned £600,000 in two previous tranches both of which have performed perfectly and been paid on time. These loans were submitted to the FCA under their wholesale lending review and no action was taken. Ablrate and *** have also sought a legal opinion from a leading expert in the peer to peer lending market about the facility detailed in this document, the conclusion of which is that these loans fall outside of the wholesale lending regulations." That passage is what prompted my question. If the FCA disagree with your "expert" opinion, then what? Have you got accessvto £5million to buy it out?
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Post by ablrate on Feb 8, 2018 16:03:01 GMT
One of the specific risks highlighted in the proposal is that the company may not be able to fulfill its grand aims (to paraphrase) should it not be able to draw down funds from the facility. Otherwise performance could be impacted. I don't know how significant those consequences could be, but seeking £5m of funding for a single company from P2P lenders at only 8% p.a. sounds a big ask to me, especially against a backdrop of apparently forthcoming rising interest rates. Standard risk warnings, many would leave them out to make the documents more 'salesy', we take a different view. I take your view, but this is significantly higher than certain other platforms with no lock in or minimum term for lenders... on a product with a track record of being very good.
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Post by ablrate on Feb 8, 2018 16:04:48 GMT
/mod hat off I see 4 outstanding charges against this company (via CH, beta), one of which is of course the/an existing ABLRATE one .. however there is at least one since then .. can ablrate tell us how these 4 stack up, and where the new loan(s) will fit in the pecking order, should it become necessary to peck?? As various people have mentioned, while the borrowing company books balance, exactly, the 'end user' of the finance provided appears to be in a negative equity position (and still digging). Some explanation would be nice. There is an inter-creditors agreement between all lenders who are par passu
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IFISAcava
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Post by IFISAcava on Feb 8, 2018 16:13:18 GMT
take 8% tax free interest until the loan matures at 2 years As long as you are happy with that.Some people seem to be treating this as something other than the reduced rate, forced par SM offering that it is, and not being aware that there is no "instant access" exit pre-term. I wouldn't invest at 12% with a market based SM, so I'll certainly not be putting any of my pennies in this. Yep. Grosses up to 14.5% pre-tax so beats MT, Lendy, COLL etc at (IMHO) less risk (insurance, diversified within the loan itself). And there's a reasonable chance I can get some cash out as and when ABL has some larger standalone loans on offer. As it is I am a bit maxed out on those that are currently available without too big a premium.
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Post by ablrate on Feb 8, 2018 16:18:28 GMT
As per page 5 and page 27: "It is important to outline that this loan does not contravene the wholesale lending provisions outlined to platforms recently by the Financial Conduct Authority. Ablrate lenders have loaned £600,000 in two previous tranches both of which have performed perfectly and been paid on time. These loans were submitted to the FCA under their wholesale lending review and no action was taken. Ablrate and *** have also sought a legal opinion from a leading expert in the peer to peer lending market about the facility detailed in this document, the conclusion of which is that these loans fall outside of the wholesale lending regulations." That passage is what prompted my question. If the FCA disagree with your "expert" opinion, then what? Have you got accessvto £5million to buy it out? Our expert opinion was our lawyer, who was head of financial regulation at a very prestigious law firm that has been around (according to their website) for over 200 years and advises a number of the large p2p firms. It was the same lawyer who represented us with the FCA during our authorization process and has done so for many others. Also, when the wholesale lending review was undertaken the FCA invited all firms to submit loans that could be caught by the wholesale lending or 'deposit taking' rule. We submitted the two loans we have outstanding with the borrower. These loans were reviewed and, to cut a long story short, the FCA communicated to us that they would not be caught by the rule. Further clarification has recently been made about wholesale lending rules which were also outline in the opinion both the borrower and we received and which concluded that the borrow is not 'deposit taking'.
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stub8535
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personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Feb 8, 2018 16:29:32 GMT
That passage is what prompted my question. If the FCA disagree with your "expert" opinion, then what? Have you got accessvto £5million to buy it out? Our expert opinion was our lawyer, who was head of financial regulation at a very prestigious law firm that has been around (according to their website) for over 200 years and advises a number of the large p2p firms. It was the same lawyer who represented us with the FCA during our authorization process and has done so for many others. Also, when the wholesale lending review was undertaken the FCA invited all firms to submit loans that could be caught by the wholesale lending or 'deposit taking' rule. We submitted the two loans we have outstanding with the borrower. These loans were reviewed and, to cut a long story short, the FCA communicated to us that they would not be caught by the rule. Further clarification has recently been made about wholesale lending rules which were also outline in the opinion both the borrower and we received and which concluded that the borrow is not 'deposit taking'. A 200 year old lawyer is probably not as sharp as they once were! Thanks for the more comprehensive answer.
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