IFISAcava
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Post by IFISAcava on Jul 10, 2018 10:39:10 GMT
The response to a question in the QA of #439 seems pretty clear.
A welcome clarification, but could have said that earlier!
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jlend
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Post by jlend on Jul 18, 2018 16:25:51 GMT
There is 3,594,996.59 invested across all four I** loans in the GEIA. Assuming an average 15% shortfall in 4 loans for simplicity gives a capital shortfall of 539,249.49 before any further recovery action by AC to make up the difference and not considering the overdue interest. There is 116,000.00 in the GEIA PF. So it looks like the PF is potentially quite a bit short. Of course there are other loans also suspended in the GEIA that may have a call on the PF. Am assuming AC have other potential actions they can take against the borrower to recover any capital and interest shortfall.
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angrysaveruk
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Post by angrysaveruk on Jul 19, 2018 7:54:47 GMT
There is 3,594,996.59 invested across all four I** loans in the GEIA. Assuming an average 15% shortfall in 4 loans for simplicity gives a capital shortfall of 539,249.49 before any further recovery action by AC to make up the difference and not considering the overdue interest. There is 116,000.00 in the GEIA PF. So it looks like the PF is potentially quite a bit short. Of course there are other loans also suspended in the GEIA that may have a call on the PF. Am assuming AC have other potential actions they can take against the borrower to recover any capital and interest shortfall. I think 15% is a bit optimistic. I have exposure to these loans through my Manual Investment account and I am expecting a larger loss on the remaining two loans we have not had an update on yet. The value of AC as a business and a leader in the P2P field must be well over £10 million so I would assume they will be willing to put more than 100k on the table to avoid the damage to their reputation that large losses on the Green Accounts would do. As a manual investor I expect losses and the 7% I have earned over the last 2 years with AC more than pays for any losses I will have on these loans - and is considerably more than I would have earned investing with any of the other larger P2P platforms.
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trouble
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Post by trouble on Jul 19, 2018 10:55:42 GMT
There is 3,594,996.59 invested across all four I** loans in the GEIA. Assuming an average 15% shortfall in 4 loans for simplicity gives a capital shortfall of 539,249.49 before any further recovery action by AC to make up the difference and not considering the overdue interest. There is 116,000.00 in the GEIA PF. So it looks like the PF is potentially quite a bit short. Of course there are other loans also suspended in the GEIA that may have a call on the PF. Am assuming AC have other potential actions they can take against the borrower to recover any capital and interest shortfall. I think 15% is a bit optimistic. I have exposure to these loans through my Manual Investment account and I am expecting a larger loss on the remaining two loans we have not had an update on yet. The value of AC as a business and a leader in the P2P field must be well over £10 million so I would assume they will be willing to put more than 100k on the table to avoid the damage to their reputation that large losses on the Green Accounts would do. As a manual investor I expect losses and the 7% I have earned over the last 2 years with AC more than pays for any losses I will have on these loans - and is considerably more than I would have earned investing with any of the other larger P2P platforms. The latest Seedrs round values them at c£50m
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angrysaveruk
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Post by angrysaveruk on Jul 19, 2018 13:33:37 GMT
I think 15% is a bit optimistic. I have exposure to these loans through my Manual Investment account and I am expecting a larger loss on the remaining two loans we have not had an update on yet. The value of AC as a business and a leader in the P2P field must be well over £10 million so I would assume they will be willing to put more than 100k on the table to avoid the damage to their reputation that large losses on the Green Accounts would do. As a manual investor I expect losses and the 7% I have earned over the last 2 years with AC more than pays for any losses I will have on these loans - and is considerably more than I would have earned investing with any of the other larger P2P platforms. The latest Seedrs round values them at c£50m A business worth 50m can easily absorb a loss of a few hundred thousand or even a few million.
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dandy
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Post by dandy on Jul 19, 2018 13:37:52 GMT
A business worth 50m can easily absorb a loss of a few hundred thousand or even a few million. A business with £50m in net assets sure. A business valued by Seedrs at £50m whilst barely making a profit, probably not. So another funding round (7?) on Seedrs coming up perhaps.
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jlend
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Post by jlend on Jul 20, 2018 14:23:13 GMT
stuartassetzcapitalI wonder what will happend to the GEIA PF now. It feels like it is the eqivalent of insolvent in terms of being able to cover shortfalls in both interest and capital. I appreciate it was not guaranteed. So there may be a better word that insolvent. How will AC treat future claims on the PF? 1. First come first served? And just wait until there is no money left? 2. Stop the PF covering any more missed interest payments on any geia loans? Etc. I think a similar issue exists with the gbba1 given the problems loans there. It wil be interesting to hear how AC will ensure lenders are treated equally in the geia and gbba1.
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jlend
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Post by jlend on Jul 30, 2018 12:56:56 GMT
stuartassetzcapital I wonder what will happend to the GEIA PF now. It feels like it is the eqivalent of insolvent in terms of being able to cover shortfalls in both interest and capital. I appreciate it was not guaranteed. So there may be a better word that insolvent. How will AC treat future claims on the PF? 1. First come first served? And just wait until there is no money left? 2. Stop the PF covering any more missed interest payments on any geia loans? Etc. I think a similar issue exists with the gbba1 given the problems loans there. It wil be interesting to hear how AC will ensure lenders are treated equally in the geia and gbba1. AC replied by email saying the PF will pay on a loan by loan basis until the PF is exhausted. So this means for the geia the first loan where the recovery process is exhausted may take all or the majority of the PF fund, leaving nothing or little for other loans, even if they are with the same borrower. Although the fund is discretionary, they said they are unable to share the PF across unrecoverable loans. They do not have the discretion to do anything else.
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dandy
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Post by dandy on Jul 30, 2018 14:23:11 GMT
AC replied by email saying the PF will pay on a loan by loan basis until the PF is exhausted. So this means for the geia the first loan where the recovery process is exhausted may take all or the majority of the PF fund, leaving nothing or little for other loans, even if they are with the same borrower. Although the fund is discretionary, they said they are unable to share the PF across unrecoverable loans. They do not have the discretion to do anything else. From that reply it sounds like AC strategy is simply first come, first served. From latest FCA report 5.89 Secondly, a requirement for the platform to have a public policy made easily available to investors (for example, via the platform website) explaining: • how the contingency fund is funded • how the contingency fund is governed • who the money in the fund belongs to • the considerations the fund/platform takes into account when deciding whether or how to exercise its discretion to pay out from the fund, including examples. This should include consideration of whether or not the fund has sufficient money to pay and that it has absolute discretion in any event not to pay or to decide the amount of the payment • the process for considering pay outs from the fund • a description of how that money will be treated in the event of the platform’s insolvency
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jlend
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Post by jlend on Aug 6, 2018 15:11:09 GMT
AC replied by email saying the PF will pay on a loan by loan basis until the PF is exhausted. So this means for the geia the first loan where the recovery process is exhausted may take all or the majority of the PF fund, leaving nothing or little for other loans, even if they are with the same borrower. Although the fund is discretionary, they said they are unable to share the PF across unrecoverable loans. They do not have the discretion to do anything else. From that reply it sounds like AC strategy is simply first come, first served. From latest FCA report 5.89 Secondly, a requirement for the platform to have a public policy made easily available to investors (for example, via the platform website) explaining: • how the contingency fund is funded • how the contingency fund is governed • who the money in the fund belongs to • the considerations the fund/platform takes into account when deciding whether or how to exercise its discretion to pay out from the fund, including examples. This should include consideration of whether or not the fund has sufficient money to pay and that it has absolute discretion in any event not to pay or to decide the amount of the payment • the process for considering pay outs from the fund • a description of how that money will be treated in the event of the platform’s insolvencyYes first come first serve when the PF runs out. Unlike Ratesetter, Growth Street and Lending works where a resolution event can be triggered.
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angrysaveruk
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Post by angrysaveruk on Aug 7, 2018 16:24:46 GMT
The recovery of two of the loans is not looking so great. So will be interesting to see how AC react.
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