Various Loan Updates (Assetz Capital)

I was astonished. With a first charge intact for the first loan, and a further loan on 2nd charge, probably at a higher rate, which doubters would not be forced to contribute to, I couldn't think of a strong reason to refuse. If AC had thought it was a bad idea they would not have continued with the process of getting our votes.

I just hope the borrower can provide alternative security for the new loan, rather than go elsewhere with all future business.

It's a double edged sword as there is a difference between crowd due diligence and herd mentality.  I don't think it's as easy as promoting discussion and then everyone will make a smart choice.  You can already see on this pretty well informed and disciplined forum that often wherever there is a gap in information there is wild speculation and assumption.  Sometimes that is productive but often it leads to a spread of mistrust before we (or another platform) are able to put out an official statement.  With these kinds of votes it doesn't strike me as being uncommon for there to be legitimate gaps in information, and given it would be a discussion on a vote AC would need to be extra careful with our responses to ensure we comply with the regulations.  That in turn would lead to a slower response from us giving more time for the speculation to run rife.

Equally expecting all lenders to make a smart choice in an information vacuum is foolhardy.  At the moment the Q&A is our solution, but I suspect in Q1 some time will be set aside to a more refined process.  It's likely to have to be on site though rather than off site in this forum simply due to our regulatory responsibilities, which necessitates some level of control.  That would be for our compliance officer to decide upon.

Not at all. It is fully understood. It would not be equitable if it was any other way. 

Hence you can read into my statement the additional but considered unnecessary post-fix "..and therefore I concur with the earlier comments that this could very likely be due to one or small number of large lenders voting for B, and hence conclude that the wording of the email would likely have made no difference (since presumably such persons take care to read and know what they are doing). Or if not that it was a large number of lenders with small positions who therefore did not take care to fully digest the communication and who might have voted differently if the email had been worded differently, but that on balance I can't fathom how it could be that".

But I considered that to be rather a lot of words to just make a statement of the obvious and therefore on balance decided not to drift into unnecessary verbiage.

Whilst the lender(s) voting for option B will ultimately have to answer for themselves, one possible concern (particularly for those holding large quantities of the present loan) could be over liquidity of their existing loan units.

In particular, the email calling for votes did not make it clear what interest rate to lenders the new loan would have, and if it was somewhat higher as might reasonably be expected for a second charge ranking behind the existing loan, those holding the existing loan may prefer to hold the new one instead, making it harder to liquidate units in the existing loan.


I think you might have nailed it sl75. Only possible explanation I can think of. Which serves to illustrate how until a loan has been taken up by smaller lenders, AC will always be in the hands of the big hitters. A shame, AC must be (at least a little bit) livid. Time to start recruiting more lenders, ofcourse. Small matter of deal flow first though.

Goes to show how building scale in P2P isn't a walk in the park.

Well, I forgot to vote, and I'm a small investor, but my initial reaction was to vote B. Here are a few reasons

Accepting the second charge would have meant effectively endorsing the new loan, without having seen the detail beyond what was stated in the email. It also implies that there is insufficient security in the new loan proposal itself.

Although on the face of it the original loan is performing well, the history of interlinked and second-tranche loans is not straightforward - e.g., Epping/Ipswich, South Coast Plumber. Without reference to the borrower in question, one needs to ask: is the borrower about to bite off more than he can chew?

I tend to view p2p lending as similar to a "bet" (and p2b even more so), and on the basis of the above, I have set myself a per-borrower limit.

Re Loan 86 - the 'Scottish loan'

The question referred to, which had been answered, has now been deleted.

The response, from memory, was to the effect that AC had asked the auction house whether a reserve price had been set. AC had been advised that there was no reserve, but that they, the auction house, were were 'hopeful' that the guideline price would be achieved.

Edit: I'm an idiot, must have been looking at the wrong tab. The Q is still there!

Edit: The AC update concerning the auction refers to 17th Dec. The auction house calendar shows nothing for that date.

Thanks, I was waiting for the email to say a question had been answered but it's not arrived yet.

Are you sure it has been deleted? This prompted me to look and the Q and A is showing for me;

Q. Do we know if the auction reserve price is set at a level to clear all capital, interest and fees?
A. Having spoken to the auction house dealing they advise that no reserve price has been set but that the guide price has been set with a view to obtaining interest and achieving a sale on the night at or above that level.

It would be a strange feature if the questioner was the only one who could see the answer.


Edit; crossed with your edit!