fric
Member of DD Central
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Post by fric on Oct 10, 2019 13:11:36 GMT
Well, lets hope Mintos will be smarter next time, and don't make such payments in advance in future. They probably gained a few gray hairs themselves... Hopefully they learnt their lesson.
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Post by geldregiertdiewelt on Oct 12, 2019 6:41:00 GMT
in this Greman forum www.p2p-kredite.com/diskussiona user claims that he has asked Mintos questions and got a reply: "Q: TTom hat Folgendes geschrieben:
Hello Mintos-Team,
In your latest update to the Aforti case you announced that you have
credited Investors before you have received the money from Aforti.
Regarding to that I have a couple of questions:
- For which other loan originators you have payed investors before
receiving the money from the loan originator in the past?
- Which was the maximum total amount at a time you have credited to
investors before you have received the money from the loan originators?
- Is it possible that the Mintos platform is at risk if more than one
loan originator at the same time is not able to pay back the already
credited amount to Mintos?
- How long is your "Grace Period" for the loan originators, until you
will mark the regarding loans in the "60+ days late" status?
Many thanks,
A: Mintos hat Folgendes geschrieben:
So.. The procedure before Aforti was that Mintos would advance the payment to investors, before waiting for payments from Loan originators. This was not done with all Loan originators, but specific ones. The Aforti case showed us that this option is not the best course of action. For time being, there are no liquidity problems for Mintos and no financial instability is foreseen, even with Aforti. We have changed this approach and I am not sure if we have made a blog post on this or not.
The case of Aforti has taught us a valuable lesson and we will change this approach, as per the same reason you have advised. It puts us at risk without giving a substantial benefit to our investors.
We follow a certain protocol with Loan Originators and what is posted on our marketplace. Therefore, we are keeping a close eye on which loans are due for payment, and for which loan we expect the loan originator to buyback.
We have an extensive team that works with Loan Originators that each has a specific role. Therefore, we can work very closely with them and there is not just one person doing a thousand tasks. Each week, we prepare them on outstanding payments for loans that will become due and for which we expect payments and we are very strict on our deadlines. Therefore, Loan Originators that do constantly miss these deadlines and don't transfer funds on given dates - we have every strict and severe interest on the payments we should receive. So the financial side, we keep it very strict and organised.
Regarding the grace period - each loan originator has a different approach based on the specifics of their business. You can check those on your Loan Originator page.
Kind regards,"I'm not sure that the Mintos answer expresses the professionalism I was expecting... Thoughts?
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Post by rahafoorum on Oct 13, 2019 5:58:00 GMT
They're totally missing the main point here though. Mintos paid for loan A without receiving payment from Aforti. Today, when loan B makes a payment, Aforti forwards that payment to Mintos and Mintos keeps it to cover their payment made towards loan A. In other words, if you own loan B, you should have received a payment, but you didn't.
That's way bigger issue than Mintos's possible difficulties. I'd assume they can manage their finances well enough to stop making prepayments before it's too late. But uncoupling payments from actual loans seems a lot worse issue, if it is the case here. Perhaps I misunderstood, but I don't see another way how they could've done this.
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Post by jmot on Oct 14, 2019 0:30:40 GMT
They're totally missing the main point here though. Mintos paid for loan A without receiving payment from Aforti. Today, when loan B makes a payment, Aforti forwards that payment to Mintos and Mintos keeps it to cover their payment made towards loan A. In other words, if you own loan B, you should have received a payment, but you didn't.
That's way bigger issue than Mintos's possible difficulties. I'd assume they can manage their finances well enough to stop making prepayments before it's too late. But uncoupling payments from actual loans seems a lot worse issue, if it is the case here. Perhaps I misunderstood, but I don't see another way how they could've done this.
It is a huge issue and probably a breach of contract on Mintos' side. I never buy C rated loans (or as a matter of fact I exclude almost half of Mintos loan originators since their financials are a joke), but if you look here: www.mintos.com/en/loan-originators/aforti/#detailsIt says "Investment Structure": Direct
So what you should have is a share of the original loan and Mintos legally cannot mix up the cash flows of the original loans, that is the whole point of having a share of the loan, there has to be a separation of the cash flow and even worse what they have done shows that they actually do not have even any segregation of client money (a good reading is how a regulated firm in the UK has to behave: www.handbook.fca.org.uk/handbook/CASS/7/13.html). This is what happens in a totally unregulated environment like P2P lending, even the biggest platform behaves like Maddoff (using other clients money to fulfill the urgent claims of separate clients).
The whole debacle is massive: Mintos is covering up bad loan originators and not showing ASAP that the originator is not able to fulfill the buyback guarantee therefore showing promptly the real originator risk to investors. Very likely they have some big conflict of interest with some loan originators and this will cause moral hazard on Mintos side. A lot of naive investors lately invest in very dubious originators offering higher interest rates (Aforti was a good example) with Mintos hiding the real risk with this behaviour.
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Post by extremis on Nov 17, 2019 22:01:01 GMT
Aforti has prematurely bought back O6 series bonds. So, they actually have cash to buy back bonds with maturity date 14.06.2021, but no cash to buy back loans that are 60+ days late on Mintos platform (88% of outstanding loans). As far as i understand buyback guarantee is an obligation of loan originators (in this case Aforti Holding SA's obligation that provides a group buyback guarantee), yet Aforti seems reluctant to honor it and Mintos seems reluctant to force them do it. Aforti group's equity is just 1.1M EUR, so right now they probably cannot cover all loans that are 60+ days late on Mintos along with the settlements made until August 8th, (and also Viventor's late loans and who knows what else). Therefore, up until now, Mintos' course of action (or lack of it) is understandable and justifiable: if they press Aforti to honor their buyback guarantee they will probably default, in which case we all loose. On the other hand, if Mintos lets Aforti use whatever cash they may still have to buyback bonds that are due somewhere in 2021, then they might default anyway with nothing left to compensate other creditors (e.g. Mintos' investors).
Why would a company in financial difficulty choose to prematurely buy back their lowest interest rate part of debt (O6 series bonds have 7% coupon rate) and not the part of debt with the highest interest rate (Aforti loans on Mintos have 11.1% average interest rate)? It doesn't make any sense to me. Unless of course they don't plan to buyback 60+ days late loans on Mintos platform at all. Any ideas?
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Post by southseacompany on Nov 18, 2019 1:22:35 GMT
Let's call it what it is. If Aforti is insolvent, making this bond payment is fraudulent conveyance. I struggle to find an explanation consistent with the assumption that they fully intend to honor their contractual obligations.
I wonder if Mintos will keep sitting by idly if the "technical problems" start increasingly looking like criminal activity. Well, I guess they're not idle since they're helping themselves to the money coming from Aforti to the chumps who bought into the "direct" investments they offered.
My prediction: in the future, we'll look back at stuff like the Aforti debacle as the reason the Baltic states started regulating P2P more strictly.
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Post by geldregiertdiewelt on Nov 18, 2019 10:22:36 GMT
Aforti has prematurely bought back O6 series bonds. So, they actually have cash to buy back bonds with maturity date 14.06.2021, but no cash to buy back loans that are 60+ days late on Mintos platform (88% of outstanding loans). As far as i understand buyback guarantee is an obligation of loan originators (in this case Aforti Holding SA's obligation that provides a group buyback guarantee), yet Aforti seems reluctant to honor it and Mintos seems reluctant to force them do it. Aforti group's equity is just 1.1M EUR, so right now they probably cannot cover all loans that are 60+ days late on Mintos along with the settlements made until August 8th, (and also Viventor's late loans and who knows what else). Therefore, up until now, Mintos' course of action (or lack of it) is understandable and justifiable: if they press Aforti to honor their buyback guarantee they will probably default, in which case we all loose. On the other hand, if Mintos lets Aforti use whatever cash they may still have to buyback bonds that are due somewhere in 2021, then they might default anyway with nothing left to compensate other creditors (e.g. Mintos' investors). Why would a company in financial difficulty choose to prematurely buy back their lowest interest rate part of debt (O6 series bonds have 7% coupon rate) and not the part of debt with the highest interest rate (Aforti loans on Mintos have 11.1% average interest rate)? It doesn't make any sense to me. Unless of course they don't plan to buyback 60+ days late loans on Mintos platform at all. Any ideas? Thanks for catching this. For me the final proof that Aforti is going belly up. Q: "Why would a company in financial difficulty choose to prematurely buy back their lowest interest rate part of debt (O6 series bonds have 7% coupon rate) and not the part of debt with the highest interest rate (Aforti loans on Mintos have 11.1% average interest rate)?" A: Because the bond owners have much more legal power and leverage than we dwarfish p2p investors! (Maybe, the bond owners are also somewhat closer to whatever forces are working in the back rooms of Aforti and Mintos, but this is speculation.) I guess this is it regarding our Aforti loans and it just reconfirms my decision to quickly reduce my Mintos stake.
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andy2001
Member of DD Central
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Post by andy2001 on Nov 19, 2019 11:33:16 GMT
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Post by wiseclerk on Nov 19, 2019 11:54:56 GMT
Forget about the share price. Only about 4% is free float.
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Post by badlord on Jan 8, 2020 17:50:32 GMT
Almost half year down the road and we still have no proper updates from Mintos nor hear any details of a plan to deal with the situation of a LO not meeting their obligations.
I guess we all learnt the hard way why FCA refused Mintos their license application. To quote from FCA’s document:
Wind-down plans 41. SYSC 4.1.8A requires that an operator of an electronic system in relation to lending (such as Mintos) must take reasonable steps to ensure that certain loans that it facilitates are managed and administered in accordance with the contractual terms of the loans, if at any time the firm ceases to carry on the activity of operating an electronic system in relation to lending. 42. The Firm has created a ‘wind-down policy’ in order to comply with SYSC 4.1.8A. The wind-down policy indicates that the Firm will wind-down the loan book in- house. 43. The Authority considers that the wind-down policy is too high level and lacks sufficient detail. As a result, the Firm’s clients may be at risk in the event that the Firm becomes insolvent. For example: a. there is limited information on how the Board will identify a wind-down situation; b. the policy fails to cater for different wind-down scenarios. For example, the Firm may have to wind down due to loss of business partner (for example, a Loan Originator). This may require a new debt collector to be appointed; and c. the communication plan contains insufficient detail to ensure that the Firm will communicate with its customers and stakeholders in a timely, effective and compliant manner.
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jo
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Post by jo on Apr 1, 2020 11:30:14 GMT
Looking forward to the Aforti payments starting to trickle-through now that March is past.
I mean, right??
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cwah
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Post by cwah on Apr 4, 2020 17:30:14 GMT
About 25% of my aforti loan payment is now under "pending payment"
So maybe some hope money will come back
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Post by badlord on Apr 5, 2020 12:03:36 GMT
About 25% of my aforti loan payment is now under "pending payment" So maybe some hope money will come back Mintos Statistics page shows that out of €1.341.800 loans outstanding €812,740 are now in pending payments status for 3 days. I went through my Aforti loans and noticed that there had been payments on them from Aforti on 31st March. I surmise that these payments are part of this pending payment amount of €812,740. It's been exactly 3 business days since 31st March.
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