sl75
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Post by sl75 on Sept 28, 2019 14:12:57 GMT
The only potential problem I see is that if a surge of bad debt erodes the surplus, they'll no longer be able to keep to the commitments made, and increase the risk that the PF may prove to be inadequate at some future date for its primary intended purpose. Seems especially pertinent to the 90D QAA. I find it extraordinarily unlikely that a sufficient surplus has yet built on the 90DAA PF for AC to even consider drawing any profit from that one...
... but it is indeed the one that's likely to be "first to fail", simply because it has a tiny margin to feed into the PF.
The other related point is that if AC weren't using the surplus from the QAA/30DAA/(any others where they currently deem there to be a surplus) for the now stated purpose, they might instead have used (part of) it to provide further seed capital to the 90DAA. Indeed it remains entirely possible they may choose to do that as well.
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dave2
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Post by dave2 on Sept 28, 2019 16:52:41 GMT
I find it extraordinarily unlikely that a sufficient surplus has yet built on the 90DAA PF for AC to even consider drawing any profit from that one... Perhaps they (AC) should apply for a Bridging Loan from Assetz Capital... 
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zlb
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Post by zlb on Sept 30, 2019 10:00:39 GMT
A few questions for Assetz on their email just sent out to investors (w.r.t Turbine loans / Provision funds). You say: "We are, however, pleased to confirm that the total provision fund balances will remain at least at the level of funding published currently on our web site as at the end of March 2019, other than some of that balance being used for provision fund payments to lenders for any normal loan loss coverage" If I've understood correctly, what you are saying is that despite the QAA's now being circa 25% larger than in March 2019, that they will now be less protected in £ terms than they were before. This means that in effect, the % coverage of the provision funds for the various QAA flavours is now being chopped significantly. So, firstly have I understood this correctly? Secondly, why are you pleased to have reduced your coverage ratio? It sounds good for Turbine investors, but QAA investors seem to be worse off. Third, can you advise how much further of the balance is also being taken away for "normal loan loss coverage"? I also wonder whether the question could be to the FCA, are they aware of the coverage ratio difference now. I'd like to see 4thway and p2pfinance news have a look at this, imagine it won't be ignored.
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ashtondav
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Post by ashtondav on Sept 30, 2019 13:09:03 GMT
Surely gbba lenders in the turbines should be covered by the PF?
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zlb
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Post by zlb on Sept 30, 2019 13:31:42 GMT
Surely gbba lenders in the turbines should be covered by the PF? Good point if I understand correctly, why wasn't the correct/GBBA pf used in this instance? I wonder whether stuartassetzcapital could explain that, as I don't think it is in the email.
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IFISAcava
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Post by IFISAcava on Sept 30, 2019 13:57:43 GMT
Surely gbba lenders in the turbines should be covered by the PF? Weren't these loans in the GEA? Where the current balance of the Provision Fund is £197,000.00? i.e. the PF isn't anywhere near enough as is?
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rrrupert
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Post by rrrupert on Sept 30, 2019 14:14:35 GMT
Surely gbba lenders in the turbines should be covered by the PF? Weren't these loans in the GEA? Where the current balance of the Provision Fund is £197,000.00? i.e. the PF isn't anywhere near enough as is? GEA and MLA. The latter has no provision fund. The GEA provision fund covers maybe 4% of the outstanding amount.
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dermot
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Post by dermot on Sept 30, 2019 14:15:44 GMT
I've just received very close to <redacted>% of my investment in the I**/G** loans back, a mix of mostly Green box with a bit of MLIA.
The next tranche due at quarter's end will be well timed to pay off the credit card for Christmas excesses.
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IFISAcava
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Post by IFISAcava on Sept 30, 2019 14:16:54 GMT
Weren't these loans in the GEA? Where the current balance of the Provision Fund is £197,000.00? i.e. the PF isn't anywhere near enough as is? GEA and MLA. The latter has no provision fund. The GEA provision fund covers maybe 4% of the outstanding amount. my point exactly - people were asking why the GBBA provision fund didn't cover it. a) wrong PF and b) nowhere near enough in the right PF.
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jlend
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Post by jlend on Oct 1, 2019 4:12:08 GMT
This isn't the first time that AC have removed deemed excess from the provision funds.
For example in the past deemed excess was removed from the GBBA1 PF. With hindsight removing excess from this PF demonstrates the challenge of assessing PF excess at a point in time. AC have a said they will not be putting back the deemed excess money into the GBBA1 PF.
It is unclear to me if the access accounts are ever short of money wether they will return the deemed excess they are currently withdrawing.
AC seem happy to remove excess from PF at any point in time, it is not clear if they will be willing to top up PFs if there is ever a shortfall.
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sl75
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Post by sl75 on Oct 1, 2019 7:10:32 GMT
Weren't these loans in the GEA? Where the current balance of the Provision Fund is £197,000.00? i.e. the PF isn't anywhere near enough as is? GEA and MLA. The latter has no provision fund. The GEA provision fund covers maybe 4% of the outstanding amount. There's also an amount of these loans held in the QAA, 30DAA and 90DAA (by my calculations less than £100k in total even before the recent change)
Whilst these would all have ringfenced funds in their PFs to cover the anticipated losses on these loans, any payments made on those loans will go a little way towards easing the pressure on the 90DAA PF in particular, and to improve coverage on the others, as the portion of the Access Accounts' PFs previously ringfenced to cover those anticipated losses can now be released to provide coverage for anticipated losses on other loans.
This isn't the first time that AC have removed deemed excess from the provision funds. The email seemed to imply that previous deemed excesses were merely reclaiming [part of] the seed capital that AC had originally put into the fund on launch of the account. (Re-checks) - oh only "primarily" doing that - so there must have been at least one instance of profit-taking previously.
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Post by Deleted on Oct 1, 2019 8:13:30 GMT
My thoughts
1) Losing one turbine is not that hard, the thing they lost is the unit in the nacelle so fits on the back of a lorry, still "Mr Worthington to lose one turbine..."
2) AC is heading towards an IPO and so want their books to be clear of the historical errors. No one likes to buy a company with uncertainty on the books and most like at least one year's figures without stuff like this lurking.
3) Using the fund to sort out this mess is kinda what the fund was for, those who are Peter might not like Paul getting money, but think of it as Insurance
4) Since these older deals were launched AC would argue they have re-focused their business model on deals where the 9% is more logical than the 12% of yore. They would also argue that as a learning business they have learnt how to dodge the dodgy borrower. Only time will tell if their theory is correct but I imagine that the costs of all that learning and development of processes need to sit on one side of the balance sheet and be reflected in a smaller Fund provision. Or that is what the FD will have argued.
5) The stirrings of the FCA from its eternal slumber may have something to do with it, but I doubt it. Back to sleep big feller.
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Post by df on Oct 1, 2019 20:38:17 GMT
I've just received very close to <redacted>% of my investment in the I**/G** loans back, a mix of mostly Green box with a bit of MLIA. The next tranche due at quarter's end will be well timed to pay off the credit card for Christmas excesses. This payment has reduced my overall value stuck in Green&Great accounts by about <redacted>%, which is a good news for me. But if I wasn't in turbines I'd still think AC made the right decision on how to bring I** saga to en end... Around 40% of my AC funds are in access accounts and I don't feel like this action adds much to already existing risk, I'm still fairly confident in access accounts' performance.
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Post by df on Oct 1, 2019 21:00:38 GMT
My thoughts
1) Losing one turbine is not that hard, the thing they lost is the unit in the nacelle so fits on the back of a lorry, still "Mr Worthington to lose one turbine..."
2) AC is heading towards an IPO and so want their books to be clear of the historical errors. No one likes to buy a company with uncertainty on the books and most like at least one year's figures without stuff like this lurking.
3) Using the fund to sort out this mess is kinda what the fund was for, those who are Peter might not like Paul getting money, but think of it as Insurance
4) Since these older deals were launched AC would argue they have re-focused their business model on deals where the 9% is more logical than the 12% of yore. They would also argue that as a learning business they have learnt how to dodge the dodgy borrower. Only time will tell if their theory is correct but I imagine that the costs of all that learning and development of processes need to sit on one side of the balance sheet and be reflected in a smaller Fund provision. Or that is what the FD will have argued.
5) The stirrings of the FCA from its eternal slumber may have something to do with it, but I doubt it. Back to sleep big feller.
I'm both, Peter and Paul, and I guess I'm not the only one in this position. I'd imagine many would put their "Paul" money into "Peter" account to catch up with earning interest.
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