IFISAcava
Member of DD Central
Posts: 3,661
Likes: 2,984
|
Post by IFISAcava on Apr 18, 2019 10:42:18 GMT
Seems to me that pretty much all the recent new loans could be bought for varying discounts after launch (although quite a few have now drifted into small premiums)
The most recent is now trading at 97-98.4%
Makes it very tempting not to buy the new offerings, or at least to buy less than you think you'd want and wait for the SM.
|
|
SteveT
Member of DD Central
Posts: 6,871
Likes: 7,915
|
Post by SteveT on Apr 18, 2019 13:12:17 GMT
Seems to me that pretty much all the recent new loans could be bought for varying discounts after launch (although quite a few have now drifted into small premiums) The most recent is now trading at 97-98.4% Makes it very tempting not to buy the new offerings, or at least to buy less than you think you'd want and wait for the SM. On the other hand, I received 48 days of Instant Returns on my launch-day investment in the same loan, equivalent to 1.84% The critical factor remains the future Ablrate policy on use of underwriters to fill large loans. This one was not underwritten and so post-launch discounting is more limited.
|
|
|
Post by ablrate on Apr 18, 2019 15:19:35 GMT
Seems to me that pretty much all the recent new loans could be bought for varying discounts after launch (although quite a few have now drifted into small premiums) The most recent is now trading at 97-98.4% Makes it very tempting not to buy the new offerings, or at least to buy less than you think you'd want and wait for the SM. On the other hand, I received 48 days of Instant Returns on my launch-day investment in the same loan, equivalent to 1.84% The critical factor remains the future Ablrate policy on use of underwriters to fill large loans. This one was not underwritten and so post-launch discounting is more limited. We are just about to launch a new underwriter program that automates the sale of holdings at par.
|
|
macq
Member of DD Central
Posts: 1,923
Likes: 1,189
|
Post by macq on Apr 18, 2019 15:59:40 GMT
On the other hand, I received 48 days of Instant Returns on my launch-day investment in the same loan, equivalent to 1.84% The critical factor remains the future Ablrate policy on use of underwriters to fill large loans. This one was not underwritten and so post-launch discounting is more limited. We are just about to launch a new underwriter program that automates the sale of holdings at par. Does that mean a loan is on the way?
|
|
|
Post by ablrate on Apr 18, 2019 16:09:55 GMT
We are just about to launch a new underwriter program that automates the sale of holdings at par. Does that mean a loan is on the way? Yes, we have one ready to go next week. We are hoping to include the new underwriting facility with a few testers.....
|
|
gustapher
Member of DD Central
Posts: 144
Likes: 267
|
Post by gustapher on Apr 18, 2019 20:34:18 GMT
I disagree it is just to do with the underwriters affecting everything. A factor yes, but another big one is the frequency of loans. You need to stop the deal flow so the overhang in the secondary market clears as people reinvest interest.
This is one of the key mistakes Lendy made. You are locking people into the loans by letting supply outstrip demand.
I'm sick of funding these loans only to be 4-5% underwater immediately.
|
|
hazellend
Member of DD Central
Posts: 2,361
Likes: 2,179
|
Post by hazellend on Apr 18, 2019 20:50:19 GMT
I disagree it is just to do with the underwriters affecting everything. A factor yes, but another big one is the frequency of loans. You need to stop the deal flow so the overhang in the secondary market clears as people reinvest interest. This is one of the key mistakes Lendy made. You are locking people into the loans by letting supply outstrip demand. I'm sick of funding these loans only to be 4-5% underwater immediately. Strange post. 1) loans are too infrequent on ABLrate 2) there is no similarity with Lendy, which doesn’t even have a variable SM 3) Why do you think you underwater? 4) if you want guaranteed liquidity you must not invest in high interest P2P, which can be complete illiquid for long periods
|
|
nw99
Posts: 340
Likes: 114
|
Post by nw99 on Apr 18, 2019 21:27:39 GMT
On the other hand, I received 48 days of Instant Returns on my launch-day investment in the same loan, equivalent to 1.84% The critical factor remains the future Ablrate policy on use of underwriters to fill large loans. This one was not underwritten and so post-launch discounting is more limited. We are just about to launch a new underwriter program that automates the sale of holdings at par. Agreed the instant returns are well worth having
|
|
gustapher
Member of DD Central
Posts: 144
Likes: 267
|
Post by gustapher on Apr 18, 2019 23:49:54 GMT
I disagree it is just to do with the underwriters affecting everything. A factor yes, but another big one is the frequency of loans. You need to stop the deal flow so the overhang in the secondary market clears as people reinvest interest. This is one of the key mistakes Lendy made. You are locking people into the loans by letting supply outstrip demand. I'm sick of funding these loans only to be 4-5% underwater immediately. Strange post. 1) loans are too infrequent on ABLrate 2) there is no similarity with Lendy, which doesn’t even have a variable SM 3) Why do you think you underwater? 4) if you want guaranteed liquidity you must not invest in high interest P2P, which can be complete illiquid for long periods I disagree. 1) There have been constant new loans on Ablrate all year. The SM market prices were shaken by issues with certain loans, wider P2P sentiment due to issues with other platforms and more recently the underwriters. However, every time there is a pause in the loans of a week or two you see the SM prices start to recover. Even a cursory look at the price action would confirm this. There is a lack of diversity of borrowers, but that is a different issue. 2) There is a similarity with Lendy - not in all aspects, but I didn't say that. I clearly stated it was one mistake Lendy made - this is not the same as saying Ablrate is the same as Lendy. That is a strawman argument you created. You are right it is different in that you can sell at a 3%-5% loss vs not being able to sell, but the broad point - that loan supply outstripping investor demand on a consistent basis is damaging to a platform's SM - is still valid. 3) I am underwater in that should I need to sell for whatever reason, I will have to sell at a discount, not because the loan is bad, but for the reasons already mentioned. When one of those reasons is within Ablrate's control, it is reasonable for me as a regular investor to mention it. I haven't been selling, but I don't think it is good for the long term health of the SM or the platform if this price action continues forever. As others have said, why invest in the original loan (which needs to be filled if the borrower is to get their money and you are to get more loans) if every time you do the de facto sale price is immediately 3%-5% less? Can you not see the basic issue here? If everyone waits because they want the cheaper prices then no loans get filled, less borrowers come to the platform and the whole thing spirals. 4) At no point did I demand "guaranteed liquidity". My point is that the current deal flow is preventing the SM recovering which has been damaged by other factors. This affects sentiment which IS important. Just look at the ratios of money on the bid/offer side to see there are problems.
|
|
registerme
Member of DD Central
Posts: 6,163
Likes: 5,977
|
Post by registerme on Apr 19, 2019 0:08:57 GMT
gustapher we must be in different loans then. I didn't own a "flat" piece of the whole ablrate loan book, but I held a lot of it. For various different reasons I've been selling down for a few weeks now. Not once have I had to sell below par.
|
|
nw99
Posts: 340
Likes: 114
|
Post by nw99 on Apr 19, 2019 5:59:40 GMT
120 is a scrappy seller hitting bids down to 97 . Have been a buyer of that
|
|
blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Apr 19, 2019 7:46:51 GMT
On the other hand, I received 48 days of Instant Returns on my launch-day investment in the same loan, equivalent to 1.84% The critical factor remains the future Ablrate policy on use of underwriters to fill large loans. This one was not underwritten and so post-launch discounting is more limited. We are just about to launch a new underwriter program that automates the sale of holdings at par. I'm not convinced that the last £100k of 120 of this did not go to underwriters - there was no firm undertaking not to do so. However, I do not worry too much about it since it would be a small part of the loan and I intend to hold for some time. Good that underwriting is being handled in the future with a thought for the SM, which is an indicator of the health of the platform as well as the route out for interest-only loans. Automated sales at par, yes, good, but I guess that manual sales below par by underwriters will be permitted. The effect of underwriting on liquidity is something I consider when lending on the Ablrate PM. 114 is still not finished at 95%.
|
|
|
Post by Ace on Apr 19, 2019 7:51:46 GMT
As I type there are 17 loans available below par and 20 loans available above par. That looks like a well balanced and well functioning SM to me.
Personally, I would prefer more loans to aid diversification and choice, even if they did depress resale prices as I won't buy loans that I'm not prepared to hold to maturity.
I would be happy to suffer a few percent discount if I needed to exit in an emergency.
One would only suffer a loss if one invested in these medium term loans and had to sell a large chunk of ones holding soon afterwards (ignoring possible defaults for a moment). Even then, it's a pretty small loss at the expense of high liquidity.
Yes, fewer loans might push SM prices higher, but for me it would mean that I would reduce my holdings on the platform, so even that isn't a certainty.
|
|
IFISAcava
Member of DD Central
Posts: 3,661
Likes: 2,984
|
Post by IFISAcava on Apr 19, 2019 8:18:06 GMT
As I type there are 17 loans available below par and 20 loans available above par. That looks like a well balanced and well functioning SM to me.Personally, I would prefer more loans to aid diversification and choice, even if they did depress resale prices as I won't buy loans that I'm not prepared to hold to maturity. I would be happy to suffer a few percent discount if I needed to exit in an emergency. One would only suffer a loss if one invested in these medium term loans and had to sell a large chunk of ones holding soon afterwards (ignoring possible defaults for a moment). Even then, it's a pretty small loss at the expense of high liquidity. Yes, fewer loans might push SM prices higher, but for me it would mean that I would reduce my holdings on the platform, so even that isn't a certainty. Agreed - ABL's SM is the best there is. The issue is new loans and the few months after. In the current market, it is tempting to wait for the 2-3% discount on resales, at least on a portion (which also then means that an emergency exit is essentially free). In previous market conditions it was FFF on new loans.
|
|
pom
Member of DD Central
Posts: 1,922
Likes: 1,244
|
Post by pom on Apr 19, 2019 8:34:03 GMT
gustapherWay I see it there are lots of accounts out there that charge a fee for early access...so it's not much different, albeit better as sometimes you can get out at a profit. And so long as you've held the loan a few months you'll at least have earned the difference in interest (albeit it'll have been taxed....for me it's less of an issue as any loss on the loan price goes against CGT anyway, usually only a few quids worth but every little helps.) And if you only need some of your money it's not going to be a big issue is it? If you think you might need ALL of your money more quickly, should you really be putting it in p2p? It's one thing not being able to get out instantly or at par on a performing loan, but if a loan goes bad it could take several years (nearly 3 on the container loans now) before you get any money at all. Way I see it loan end dates are only really relevant to portfolio maintenance - if you think you'll need the capital in the next 5yrs, perhaps you should put it somewhere else. Unfortunately I think having SMs on platforms has perhaps given people far too high a feeling of security.
|
|