jlend
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Post by jlend on Mar 14, 2018 21:35:30 GMT
I thought the actual loans were held in a separate company not in administration so the administrator couldn't sell the loans. It was not their loan book to sell. There is a company acting as the security trustee, which holds any security for the loan book. The company in administration is responsible for acting as the agent for lenders and managing the loans in accordance with the T&Cs. I imagine the loans could be moved elsewhere in more than one way: a company could acquire the platform and be nominated as the new agent responsible for managing the loans (i.e. existing loan agreements would remain in place), or alternatively one or more companies could buy up loans by way of refinancing them (i.e. existing loan agreements would be repaid). Thank you for making it clearer
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Mar 14, 2018 21:41:36 GMT
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star dust
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Post by star dust on Mar 14, 2018 21:51:58 GMT
I thought the actual loans were held in a separate company not in administration so the administrator couldn't sell the loans. It was not their loan book to sell. More complicated than I thought. If you search the London Gazette for the obvious company name you should find the administration notice easily enough. That will tell you that three related companies were put into administration, including the company that holds the securities. I've just added the link to the notice including all three companies to the post in the pinned thread here.
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Post by dualinvestor on Mar 14, 2018 22:06:31 GMT
The article has not beentered posted (as far as I am aware) but the possibility if an Ablrate take over of the loan book has. It was generally thought given their track record and size it was unlikely to be vìable, but never say never.
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star dust
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Post by star dust on Mar 14, 2018 22:20:43 GMT
The article has not beentered posted (as far as I am aware) but the possibility if an Ablrate take over of the loan book has. It was generally thought given their track record and size it was unlikely to be vìable, but never say never. It has been posted by cb25, and it was also added to this post in the pinned thread.
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blender
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Post by blender on Mar 15, 2018 1:07:49 GMT
I am not keen on words about buying the Collateral loan book. The owners of the loans (the right to receive the repayments) are the lenders, not Collateral. And so the Administrator cannot sell the loans or the loan book (the set of the loans). Buying the loans would involve paying the lenders their principal - which no P2P company is going to do. So we should talk about others taking over the management of the loans, or buying the business. The Administrator works for the creditors of the company - and the lenders are creditors of the borrowers, not the company. If all client money is segregated and secure (we hope) then the lenders are not creditors of the company. Presumably the first choice of the Adminstrator is to maintain the business a going concern and hand it back to its owners (which might be tricky with the FCA approval missing). The second choice would presumably be to sell the P2P business as a going concern to an FCA approved company - having stripped out any non-P2P elements. If the company is to be liquidated, then the living will must be considered - since that is what would be expected to be in force. Quite how another P2P company just takes over the management of the existing P2P loans, presumably with some sort of dowry to fund it, seems difficult to understand. As for buying the right to manage the loans - well you would not pay money for that, especially if there are no future fees from the borrowers (I presume). Someone please explain?
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withnell
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Post by withnell on Mar 15, 2018 6:48:59 GMT
My bold Slightly misleading working on the link - I thought that things had moved on quickly before I clicked on it...
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mason
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Post by mason on Mar 15, 2018 7:07:10 GMT
Quite how another P2P company just takes over the management of the existing P2P loans, presumably with some sort of dowry to fund it, seems difficult to understand. As for buying the right to manage the loans - well you would not pay money for that, especially if there are no future fees from the borrowers (I presume).
Someone please explain?
A fair proportion of the loans are, in effect, rolling credit facilities, so if these continued to renew, there would be an associated income stream for a company that took over. The likely candidate for a company buying the right to manage the loans would probably not be an existing P2P company, but an FCA authorised firm looking to enter the P2P market. It might also appeal to a very small P2P company looking to rapidly grow its customer base. I don't know if such scenarios would make sense from a practical viewpoint. Most likely in my opinion is for other P2P companies to pick over the bones and arrange a refinance of loans a borrower is not looking to repay at the end of the term. This would be win-win as the new P2P company could manage the loans under their own terms and fees and the administrator can reduce the number of loans likely to enter into default due to an expectation they would be renewed. Existing lenders would be bought out of those loan contracts just as they would when a typical P2P loan refinances to a new platform.
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james100
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Post by james100 on Mar 15, 2018 8:05:57 GMT
I thought the actual loans were held in a separate company not in administration so the administrator couldn't sell the loans. It was not their loan book to sell. <snip> Just a quick note on this as I've seen it mentioned a number of times. AIUI, the definition of "security trustee" was amended in the new T&Cs of 1 June 2017 to include the option of other collateral companies and not just the security trustee ltd. Off the top of my head the relevant clauses were sec 3 (definition of security trustee), 2.1 & 2.3 (definitions of security trustee ltd and collateral group) and 10.6.2 (f) and there's a diffnow report posted on a previous thread (https://www.diffnow.com/?report=1lhds) indicating this on line 54. This also appeared to be the case in the latest version of T&C which included the amends re no FCA regulation/authorisation. I'm not sure of the relevance of this, or if indeed there is any practical relevance at all, but unless it is confirmed either by the administrator or through other documentation (filed charges etc) then I'm not sure if it can be automatically assumed all security is held in the separate security trustee ltd entity. Edit: I am not up to date on these threads at all so apologies if this point has already been dealt with.
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Post by dualinvestor on Mar 15, 2018 8:50:54 GMT
There is a company acting as the security trustee, which holds any security for the loan book. <snip> Just a quick note on this as I've seen it mentioned a number of times. AIUI, the definition of "security trustee" was amended in the new T&Cs of 1 June 2017 to include the option of other collateral companies and not just the security trustee ltd. Off the top of my head the relevant clauses were sec 3 (definition of security trustee), 2.1 & 2.3 (definitions of security trustee ltd and collateral group) and 10.6.2 (f) and there's a diffnow report posted on a previous thread (https://www.diffnow.com/?report=1lhds) indicating this on line 54. This also appeared to be the case in the latest version of T&C which included the amends re no FCA regulation/authorisation. I'm not sure of the relevance of this, or if indeed there is any practical relevance at all, but unless it is confirmed either by the administrator or through other documentation (filed charges etc) then I'm not sure if it can be automatically assumed all security is held in the separate security trustee ltd entity. Edit: I am not up to date on these threads at all so apologies if this point has already been dealt with. There are two types os security, for the pawn loans the physical asset, generally thsee are in a safe belonging to the main Collateral company (as I understand it a few items ate held by the debtor themselves for specific reasons such as size) a lot of these loans have automatically renewed but will no longer do so. The other category are property loans where the security trustee company holds the charge as trustee for the lenders. The latter method is widely used by P2P companies and is meant to protect lenders. In theory the charges could be assigned to a third party whilst retaining protection for lenders. However there would be many practical difficulties in doing so with any sale of the loan book requiring all lenders becoming clients of the new manager who would need to fulfil KYC checks on all lenders and have all appropriate P2P and Consumer Credit Act Authorisations So while I am sure the Administrator would welcome an offer to take over collection of the loan book there are very high obstacles to accepting one.
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ablender
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Post by ablender on Mar 15, 2018 9:32:17 GMT
I am not keen on words about buying the Collateral loan book. The owners of the loans (the right to receive the repayments) are the lenders, not Collateral. And so the Administrator cannot sell the loans or the loan book (the set of the loans). Buying the loans would involve paying the lenders their principal - which no P2P company is going to do. So we should talk about others taking over the management of the loans, or buying the business. The Administrator works for the creditors of the company - and the lenders are creditors of the borrowers, not the company. If all client money is segregated and secure (we hope) then the lenders are not creditors of the company. Presumably the first choice of the Adminstrator is to maintain the business a going concern and hand it back to its owners (which might be tricky with the FCA approval missing). The second choice would presumably be to sell the P2P business as a going concern to an FCA approved company - having stripped out any non-P2P elements. If the company is to be liquidated, then the living will must be considered - since that is what would be expected to be in force. Quite how another P2P company just takes over the management of the existing P2P loans, presumably with some sort of dowry to fund it, seems difficult to understand. As for buying the right to manage the loans - well you would not pay money for that, especially if there are no future fees from the borrowers (I presume). Someone please explain?
Hi blender. I am with you when you talk about the loan book. Would you tend to agree that Collateral is a business (irrespective of the state it might currently be) and as such it can sell part or all of the business to another, including the management of these loans? Or something along these lines. This with the understanding that things now will have to be done through the Administrators.
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dermot
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Post by dermot on Mar 15, 2018 10:15:17 GMT
Rather than an outright sale of the loanbook - doubtless a complex task - it may be that when loans of the pawn category come up for renewal, the borrowers could be directed to another platform if they want to extend their loan.
Even trying some orderly transfer like that is pretty complex, however; a convey of armoured trucks convey bling from one vault to another?
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hantsowl
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Post by hantsowl on Mar 15, 2018 10:35:16 GMT
Reading through the letter from the administrator again I notice the following....
"What is the future for Collateral?
The Directors of the Company have recently appointed new external counsel and specialist
compliance consultants with regard their business model and approach.
In terms of the current business model and the Company’s correspondence with you:
a. The Company has ring fenced the existing loan book and will look to wind this down
over the life of the loans in an appropriate way.
b. The Company is reviewing how it might best continue the business, a number of
potential routes forward have been identified but these are still being assessed."
Could the appointment of specialist compliance consultations suggest that Collateral are trying to sort out their issues with the FCA in order to resume trading? If that was possible it would probably be the best solution for everyone concerned.
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mason
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Post by mason on Mar 15, 2018 12:53:54 GMT
There is a company acting as the security trustee, which holds any security for the loan book. <snip> Just a quick note on this as I've seen it mentioned a number of times. AIUI, the definition of "security trustee" was amended in the new T&Cs of 1 June 2017 to include the option of other collateral companies and not just the security trustee ltd. Off the top of my head the relevant clauses were sec 3 (definition of security trustee), 2.1 & 2.3 (definitions of security trustee ltd and collateral group) and 10.6.2 (f) and there's a diffnow report posted on a previous thread (https://www.diffnow.com/?report=1lhds) indicating this on line 54. This also appeared to be the case in the latest version of T&C which included the amends re no FCA regulation/authorisation. I'm not sure of the relevance of this, or if indeed there is any practical relevance at all, but unless it is confirmed either by the administrator or through other documentation (filed charges etc) then I'm not sure if it can be automatically assumed all security is held in the separate security trustee ltd entity. Edit: I am not up to date on these threads at all so apologies if this point has already been dealt with. That is quite interesting. I had picked up on the fact that Collateral Agent was defined in such a way to permit other group companies to fulfil this role, but didn't notice this was also true of the Security Trustee - which would make sense given the situation with physical items.
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mason
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Post by mason on Mar 15, 2018 12:56:24 GMT
Could the appointment of specialist compliance consultations suggest that Collateral are trying to sort out their issues with the FCA in order to resume trading? If that was possible it would probably be the best solution for everyone concerned. No doubt Collateral was trying very vigorously to "sort out their issues with the FCA" immediately prior to entering administration, but the road to gaining full authorisation starting from where we are now is likely to be too long for the platform to resume trading as it was before the regulatory issues came home to roost.
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