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Post by davee39 on Aug 12, 2020 19:05:10 GMT
Much depends on the direction taken by loan discounts.
If 5% discounts continue to be available, normal liquidity is unlikely to resume.
At present the proportion of 'bad' loans in the Access Accounts is increasing as the good loans repay.
The 'bad' loans are covered by both the provision fund (a supernatural entity which has never been seen in use) and 'ring fencing' which is intended to allow bad loans to trade by protecting losses.
Imagine in a years time that the Account contents now include more bad loans. There may be 100% capital protection, but, as we have seen with loan 227, you could wait many, many, years before the protections are activated. This would be a worst case which assumes normal liquidity never returns.
A scenario leading to normality would see discounting settle at a low level, this might be seen as a fair sellout fee. The interest rate already looks attractive compared to cash. Some lenders might be tempted to cancel their withdraw request. If there are insufficient discounted loans to meet demand from new money, withdrawal request from the par queue would start to be satisfied. Once the withdrawal demand is met the accounts return to normal market conditions, allowing the accounts to invest in new loans.
If things are as attractive as AC suggest in their Seedr's pitch, I would expect to see a 180 day or 360 day account appear to help increase liquidity in Access.
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Post by drphil on Aug 12, 2020 19:12:15 GMT
Do any of you kind people fancy trying to explain in simple terms what is going to happen. Brief scenario. I have, for me, some chunky amounts in the 30DAA and the 90DAA. About £160,000 in total. I don't need it back now, nor for the next couple of years or so BUT I do want it back at some point. I gave notice on all the amounts back in March just as a precaution so have been getting the odd few hundred paid back into my cash holding account. If I do nothing and just leave the withdrawal requests to sit there and presumably continue to get the odd few hundred paid back then is that it for the foreseeable future or do AC have a plan with which to get the bulk back to me. Long term, willing to take a degree of risk of a haircut on it if things go sour but only if there is a mechanism in the background which is planned to allow me to exit at some point in the future without having to then also use the discount facility. I realise there are no crystal balls around just asking if there is something I have missed. Thanks for any simply worded explanations. Rich In my case, I have been invested for several years , so that if I can now exit the remaining 70% (30% already repaid) of my investment on a smallish discount, say 5%, I will because the effect on my overall all-time interest rate will be small (particularly taking into account various accumulated loyalty bonuses).
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puddleduck
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Post by puddleduck on Aug 12, 2020 19:18:18 GMT
In my view, selling out at say at 5% discount is going to be less painful than what I see as inevitable loses.
My reasoning? Firstly there is a cash component of the Access Accounts that you will never see back via the redemption or part redemptions which are currently contributing to withdrawals. This cash is around 6% to 10% of your AA balance.
Secondly there are several loans that will see large losses therefore any redemptionz you do get back will not fully pay you back. For example, #824 Assetz are predicting a 52% capital loss. So if you wait out for redemption you'll never see all your capital back vs your current holding. The provision funds I think you can assume will not top up lost capital.
If normal market conditions return and the Access Accounts start trading as before, this is your get out of jail free card, but I think that is unlikely in the short or medium turn.
If you look at predicted loses Assetz give on their capital valuations on suspended loans, in my view holding out for withdrawals funded by redemptions is almost certainly going to lead to a bigger haircut than selling out now with a small discount of your choosing.
I've written here before that I see no long term future with Access accounts now the illusion of liquidity has been irrevocably shattered.
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dovap
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Post by dovap on Aug 12, 2020 19:26:40 GMT
I think the long term future of the access accounts is to end up like the other zombie accounts tbh.
If that junk could be rolled into this new offering I'd happily take a much bigger hit to be rid of the lot
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johni
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Post by johni on Aug 12, 2020 21:15:57 GMT
In my view, selling out at say at 5% discount is going to be less painful than what I see as inevitable loses. My reasoning? Firstly there is a cash component of the Access Accounts that you will never see back via the redemption or part redemptions which are currently contributing to withdrawals. This cash is around 6% to 10% of your AA balance. Secondly there are several loans that will see large losses therefore any redemptionz you do get back will not fully pay you back. For example, #824 Assetz are predicting a 52% capital loss. So if you wait out for redemption you'll never see all your capital back vs your current holding. The provision funds I think you can assume will not top up lost capital. If normal market conditions return and the Access Accounts start trading as before, this is your get out of jail free card, but I think that is unlikely in the short or medium turn. If you look at predicted loses Assetz give on their capital valuations on suspended loans, in my view holding out for withdrawals funded by redemptions is almost certainly going to lead to a bigger haircut than selling out now with a small discount of your choosing. I've written here before that I see no long term future with Access accounts now the illusion of liquidity has been irrevocably shattered. What discount have you sold out at?
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Post by Harland Kearney on Aug 12, 2020 21:37:58 GMT
I would likely sell out at 2-3% discount. However right now my QAA benefits from the 1% cashback, so I'm temped to continue withdrawing redeptions until I get that amount. By then I'm sure my total capital investment will have reduced alot; use the 1% cashback to help pay for the discount fee.
I dont' need the money, but I want to reduce exposure, need to get AC exposure down to <5% of portfilio. Currently sitting at 10%
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puddleduck
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Post by puddleduck on Aug 13, 2020 4:06:03 GMT
In my view, selling out at say at 5% discount is going to be less painful than what I see as inevitable loses. My reasoning? Firstly there is a cash component of the Access Accounts that you will never see back via the redemption or part redemptions which are currently contributing to withdrawals. This cash is around 6% to 10% of your AA balance. Secondly there are several loans that will see large losses therefore any redemptionz you do get back will not fully pay you back. For example, #824 Assetz are predicting a 52% capital loss. So if you wait out for redemption you'll never see all your capital back vs your current holding. The provision funds I think you can assume will not top up lost capital. If normal market conditions return and the Access Accounts start trading as before, this is your get out of jail free card, but I think that is unlikely in the short or medium turn. If you look at predicted loses Assetz give on their capital valuations on suspended loans, in my view holding out for withdrawals funded by redemptions is almost certainly going to lead to a bigger haircut than selling out now with a small discount of your choosing. I've written here before that I see no long term future with Access accounts now the illusion of liquidity has been irrevocably shattered. What discount have you sold out at? I wrote a little bit about my sell out experience at 5%-ish here: p2pindependentforum.com/post/398961
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theta
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Post by theta on Aug 13, 2020 5:53:31 GMT
In my view, selling out at say at 5% discount is going to be less painful than what I see as inevitable loses. My reasoning? Firstly there is a cash component of the Access Accounts that you will never see back via the redemption or part redemptions which are currently contributing to withdrawals. This cash is around 6% to 10% of your AA balance. Can you please clarify that? I see it as the opposite, ie the cash component of the AA accounts' holdings is included in what is traded in the SM, and I'd rather buy cash at a discount than sell.
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puddleduck
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Post by puddleduck on Aug 13, 2020 6:09:32 GMT
In my view, selling out at say at 5% discount is going to be less painful than what I see as inevitable loses. My reasoning? Firstly there is a cash component of the Access Accounts that you will never see back via the redemption or part redemptions which are currently contributing to withdrawals. This cash is around 6% to 10% of your AA balance. Can you please clarify that? I see it as the opposite, ie the cash component of the AA accounts' holdings is included in what is traded in the SM, and I'd rather buy cash at a discount than sell. There is a cash competent (non-invested money) held in the Access Accounts. This never comes back via redemption payments. So folks holding out for the slow drip feed via the current redemption withdrawal process are not going to get their hands on this unless a) The Access Accounts return to market conditions and the cash would then be sold out at par b) They sell out on the secondary market now and take a hit Example - Assume you have a 100k holding in the Access Accounts About 6-10% of that is held uninvested as cash The remaining 90-94% percent is invested in loans - the only way to get your hands on this money is a withdrawal, which at the moment is funded by redemptions mostly. These redemptions I have been tracking have almost always repaid less than my actual holding, so I'm not getting 100% back, as Assetz are also funding new tranchesThere is another 15% of suspended loans that will redeem with losses. So you can't get your hands on that 6-10% cash, redemption are not paying 100% and that's not talking about the suspended loans. This is why I think given the above, considering a discount rather than sit out the drip-drip is a call worth considering. I just can't see how you will get back everything considering the above. I may be wrong of course, and my decision to exit at 5% now rather than sit out for the slow drip-drip of redemption is a defensive tactic as I predict almost certain losses which will be higher than the discounted selling price (as do Assetz when you look at the capital values of the suspended loans) I'm not offering advice here I hasten to add.
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Post by chris on Aug 13, 2020 6:40:39 GMT
But is this, at least partially, a new set of code? (ie not a recycling of the MLA marketplace) Maybe a floater slipped through the filters ....   We still use numeric / big number data types everywhere, but AIUI a mistake was made in the input validation that was checking as a float. The dev team are aware and either have fixed it or will deploy the fix this morning.
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theta
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Post by theta on Aug 13, 2020 7:45:43 GMT
So you can't get your hands on that 6-10% cash, redemption are not paying 100% and that's not talking about the suspended loans. This is why I think given the above, considering a discount rather than sit out the drip-drip is a call worth considering. I just can't see how you will get back everything considering the above. To "get your hands" to that cash you would need to wait for eventual repayment of loans, or someone else to replace you because they are happy to continue being in that business. I see it as a drag on performance, but not as a reason to discount it. Would you discount a company that has lots of cash in its balance sheet and for whatever reason doesn't distribute it as dividends? To be clear, I am not saying there's no justification for discounting the overall account, I'm only referring to the cash component, that if anything I see as a risk reducing element.
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Post by essexboy on Aug 13, 2020 8:13:39 GMT
So, dare I ask where the redemption distributions are?
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iann
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Post by iann on Aug 13, 2020 8:39:01 GMT
So, dare I ask where the redemption distributions are? I've asked that question of AC and I am waiting for a response via email.
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iRobot
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Post by iRobot on Aug 13, 2020 8:45:13 GMT
So, dare I ask where the redemption distributions are? I've asked that question of AC and I am waiting for a response via email. / essexboy - did you receive nothing y'day? I received a payment at 13:22 (QAA) for the equivalent of £82.25 per £10k invested. By comparison, the previous average for any contiguous 10 day period under the current method was £58.46 per £10k.
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iann
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Post by iann on Aug 13, 2020 8:52:44 GMT
I've asked that question of AC and I am waiting for a response via email. / essexboy - did you receive nothing y'day? I received a payment at 13:22 (QAA) for the equivalent of £82.25 per £10k invested. By comparison, the previous average for any contiguous 10 day period under the current method was £58.46 per £10k. Yes, I got a payment at 13:22 (in the region of £81.84 per £10k).
I have asked AC whether this was a roll-up or the first of a number of distributions.
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