|
|
Post by honda2ner on Apr 27, 2020 15:03:05 GMT
Indeed. The mathematics and the assumption behind them are wrong and very substantially overstates the withdrawal requests and double counts an extremely substantial sum overlapping between MLA and AAs. We will continue to take little part in this board given the wild statements being made by a handful of posters, even in the face of repeatedly stated facts. , I would encourage you to continue to actively participate in the forum. Easy interaction with management was one of the factors which gave me confidence in AC when I was a new investor. If anything, your participation is more important than ever at the moment, so that you can set the record straight and help to build back the confidence of those who are the most sceptical of your methods. Couldn't agree more, don't think AC has done everything right (far from it) but KEEP TALKING TO US and we might forgive you unless we work for Ratesetter. ;-)
|
|
chris1200
Member of DD Central
Posts: 827
Likes: 508
|
Post by chris1200 on Apr 27, 2020 15:10:03 GMT
The size of the queue to sell at par value (in the present Access Account withdrawal queue that only permits exits at par value) is somewhat artificial in our view versus the size of any new queue under the new marketplace that is proposed. That is what really matters in the current market. Measuring the queue at present is relatively meaningless as it is the equivalent of wondering how many stock market investors would like to have access to January's share prices again to sell at, instead of today's far lower share prices as some people panic sell their shares. It is entirely understandable that that impossible sales opportunity at January's prices would create far more wishes to sell than at today's now lower share prices.
We expect that the total of genuine wishes to sell at a price that others are willing to pay for with the current market uncertainties will be a small fraction of the current queue and at the same time offer people who require the money to get out, at a price. This is how all markets work and we are intending to implement that shortly and will be the first platform to provide that option. I'm not sure this is particularly fair. AC has clearly been based on two models. One option had lower rates in return for spreading risk and ease of access (subject to liquidity). The other option had (likely) higher rates in return for taking on individual risk and (potentially) less available access. That is to say, access account holders have, in the long term, been paid lower interest rates on the basis that they were not operating in a "market" in which the effective value of their investments may change. That is what the MLA has been for. To introduce such a risk now negates the point of the lower rates that access account holders have been paid up until now. Furthermore, as alender mentions above, access account holders have never been able to choose their underlying investments and are meant to have their risk pooled across the whole access account. Please can you confirm, therefore, that any discount would be a blanket one across that whole access account, rather than attaching to particular underlying loans?
|
|
|
|
Post by stuartassetzcapital on Apr 27, 2020 15:14:56 GMT
The size of the queue to sell at par value (in the present Access Account withdrawal queue that only permits exits at par value) is somewhat artificial in our view versus the size of any new queue under the new marketplace that is proposed. That is what really matters in the current market. Measuring the queue at present is relatively meaningless as it is the equivalent of wondering how many stock market investors would like to have access to January's share prices again to sell at, instead of today's far lower share prices as some people panic sell their shares. It is entirely understandable that that impossible sales opportunity at January's prices would create far more wishes to sell than at today's now lower share prices.
We expect that the total of genuine wishes to sell at a price that others are willing to pay for with the current market uncertainties will be a small fraction of the current queue and at the same time offer people who require the money to get out, at a price. This is how all markets work and we are intending to implement that shortly and will be the first platform to provide that option. I'm not sure this is particularly fair. AC has clearly been based on two models. One option had lower rates in return for spreading risk and ease of access (subject to liquidity). The other option had (likely) higher rates in return for taking on individual risk and (potentially) less available access. That is to say, access account holders have, in the long term, been paid lower interest rates on the basis that they were not operating in a "market" in which the effective value of their investments may change. That is what the MLA has been for. To introduce such a risk now negates the point of the lower rates that access account holders have been paid up until now. Furthermore, as alender mentions above, access account holders have never been able to choose their underlying investments and are meant to have their risk pooled across the whole access account. Please can you confirm, therefore, that any discount would be a blanket one across that whole access account, rather than attaching to particular underlying loans? This is our intention yes. selling some or all of an Access Account holding at a price at or less than par value. No choice over which loans, just whatever your holdings are. There is no need for anyone to participate in selling of course unless they wish to try to force liquidity at a price per personal reasons. In normal market conditions there would not be expected to be any need for anything other than selling at par and the market would function in much the same way as withdrawals always have done until now.
|
|
alanh
Posts: 556
Likes: 560
|
Post by alanh on Apr 27, 2020 15:19:34 GMT
So the latest numbers from Stuart allow us to see the full extent of the money looking to exit the platform On the MLA there are £83m of loans up for sale - this is easily obtainable from the loan book download. Stuarts latest release says "over 75% remain invested in the access accounts" - If it was anything much over 75% he would have no hesitation in using the higher number so its reasonable to assume 25% of the access accounts are exiting. The access account total is £215m, 25% of which is £54m £83m + £54m = £137m that is the amount of money leaving the platform Ok. First of all the £83m includes sums being released by the access accounts so its not £83m +£54m, its just £83m. Second much of the £83m has been available since the loans drawdown as the access accounts always make the bulk of their holdings available on the market as part of the day to day account operation so the £83m isn't evidence of the sums looking to leave the platform. Third RMs point - selling isnt leaving Fourth stuarts post references investors, not cash so no value can be extrapolated from that statement as 25% could represent any % of the cash Fifth, withdrawal requests isn't defined, does it include requests to exit the accounts to invest in MLA, requests to exit the QAA to invest in 90DAA/30DAA or any permutation of inter account transfers so again nothing can be extrapolated from this statement Edit Sixth CBs point Your double counting argument is incorrect and its very easy to see why. You are assuming that every single penny of the £54m access account queue is up for sale in the £83m number. This is incorrect. For starters, 13.1% of the access account holdings are suspended and are untradeable - thats £7.1m not double counted Of the remaining £46.9m, if you analyse the loanbook you will see that the amounts for sale on many loans are less than the holdings in the access accounts. Calculating the excess remaining in the access accounts gives another 48% of the loanbook = £25.9m not double counted. So that makes £33m certainly not double counted. The remaining £21m has amounts for sale that are greater than the access account holdings in the respective loans. Some of this may come from the access accounts, some not. That gives a potential double counting range between zero and £21m.
|
|
chris1200
Member of DD Central
Posts: 827
Likes: 508
|
Post by chris1200 on Apr 27, 2020 15:19:39 GMT
I'm not sure this is particularly fair. AC has clearly been based on two models. One option had lower rates in return for spreading risk and ease of access (subject to liquidity). The other option had (likely) higher rates in return for taking on individual risk and (potentially) less available access. That is to say, access account holders have, in the long term, been paid lower interest rates on the basis that they were not operating in a "market" in which the effective value of their investments may change. That is what the MLA has been for. To introduce such a risk now negates the point of the lower rates that access account holders have been paid up until now. Furthermore, as alender mentions above, access account holders have never been able to choose their underlying investments and are meant to have their risk pooled across the whole access account. Please can you confirm, therefore, that any discount would be a blanket one across that whole access account, rather than attaching to particular underlying loans? This is our intention yes. selling some or all of an Access Account holding at a price at or less than par value. No choice over which loans, just whatever your holdings are. There is no need for anyone to participate in selling of course unless they wish to try to force liquidity at a price per personal reasons. In normal market conditions there would not be expected to be any need for anything other than selling at par and the market would function in much the same way as withdrawals always have done until now. Thanks for confirming on the first point. On the second - I take your point, but this is potentially a little disingenuous in that the introduction of a market necessarily forces people to consider selling at a discount. It is not as simple as 'if you wish to'. This would be a really significant transformation of the product that access account holders bought into.
|
|
alender
Member of DD Central
Posts: 981 
Likes: 683
|
Post by alender on Apr 27, 2020 15:19:43 GMT
I'm not sure this is particularly fair. AC has clearly been based on two models. One option had lower rates in return for spreading risk and ease of access (subject to liquidity). The other option had (likely) higher rates in return for taking on individual risk and (potentially) less available access. That is to say, access account holders have, in the long term, been paid lower interest rates on the basis that they were not operating in a "market" in which the effective value of their investments may change. That is what the MLA has been for. To introduce such a risk now negates the point of the lower rates that access account holders have been paid up until now. Furthermore, as alender mentions above, access account holders have never been able to choose their underlying investments and are meant to have their risk pooled across the whole access account. Please can you confirm, therefore, that any discount would be a blanket one across that whole access account, rather than attaching to particular underlying loans? This is our intention yes. selling some or all of an Access Account holding at a price at or less than par value. No choice over which loans, just whatever your holdings are. There is no need for anyone to participate in selling of course unless they wish to try to force liquidity at a price per personal reasons. In normal market conditions there would not be expected to be any need for anything other than selling at par and the market would function in much the same way as withdrawals always have done until now. Can you tell us where this money will go, is it to be kept in the AAs so it benefits lenders staying in these accounts?
Also will this slow or in effect stop the process of AA lenders getting their money out at par?
Can the AA lenders have a vote on the preposed changes?
|
|
SteveT
Member of DD Central
Posts: 6,875
Likes: 7,924
|
Post by SteveT on Apr 27, 2020 15:21:05 GMT
This is our intention yes. selling some or all of an Access Account holding at a price at or less than par value. No choice over which loans, just whatever your holdings are. Presumably, as per SM trading via the MLA, lenders will therefore also be invited to bid to purchase discounted Access Account holdings (as opposed to discounted offers taking precedence over existing Access Account withdrawal requests at par)?
|
|
alender
Member of DD Central
Posts: 981
Likes: 683
|
Post by alender on Apr 27, 2020 15:32:56 GMT
This is our intention yes. selling some or all of an Access Account holding at a price at or less than par value. No choice over which loans, just whatever your holdings are. Presumably, as per SM trading via the MLA, lenders will therefore also be invited to bid to purchase discounted Access Account holdings (as opposed to discounted offers taking precedence over existing Access Account withdrawal requests at par)? I really do not want to see an SM in AA holdings, this breaks the primary concept of AAs, I do not want this turning into some sort of Structured Financial Instrument AKA Collateralised Debt Obligation. This will lock up the AAs probably for good and those who do not want to sell at below par may way feel they have to just so they are not left with a falling asset.
|
|
|
|
Post by chris on Apr 27, 2020 15:34:15 GMT
This is our intention yes. selling some or all of an Access Account holding at a price at or less than par value. No choice over which loans, just whatever your holdings are. There is no need for anyone to participate in selling of course unless they wish to try to force liquidity at a price per personal reasons. In normal market conditions there would not be expected to be any need for anything other than selling at par and the market would function in much the same way as withdrawals always have done until now. Can you tell us where this money will go, is it to be kept in the AAs so it benefits lenders staying in these accounts?
Also will this slow or in effect stop the process of AA lenders getting their money out at par?
Can the AA lenders have a vote on the preposed changes?
It is a trade between a buyer and seller, with the seller offing the buyer a discount for taking over their holding. There's no money entering or leaving the access accounts.
|
|
|
|
Post by stuartassetzcapital on Apr 27, 2020 15:38:38 GMT
This is our intention yes. selling some or all of an Access Account holding at a price at or less than par value. No choice over which loans, just whatever your holdings are. There is no need for anyone to participate in selling of course unless they wish to try to force liquidity at a price per personal reasons. In normal market conditions there would not be expected to be any need for anything other than selling at par and the market would function in much the same way as withdrawals always have done until now. Can you tell us where this money will go, is it to be kept in the AAs so it benefits lenders staying in these accounts?
Also will this slow or in effect stop the process of AA lenders getting their money out at par?
Can the AA lenders have a vote on the preposed changes?
Sales proceeds will go to the seller as it is a private arrangement between buyer and seller like other markets other than we have no plan for a normal trading margin or fee at this time for this function. As it is a market driven by supply and demand we cannot predict its levels or its effects on buyer and seller behavior. There will be no vote because it is extra functionality where the market will naturally dip into discounts if sellers outweigh new investors and if investors outweigh sellers prices should return to par as the withdrawal queue always operated to date before these unprecedented times.
|
|
SteveT
Member of DD Central
Posts: 6,875
Likes: 7,924
|
Post by SteveT on Apr 27, 2020 15:38:55 GMT
Presumably, as per SM trading via the MLA, lenders will therefore also be invited to bid to purchase discounted Access Account holdings (as opposed to discounted offers taking precedence over existing Access Account withdrawal requests at par)? I really do not want to see an SM in AA holdings, this breaks the primary concept of AAs, I do not want this turning into some sort of Structured Financial Instrument AKA Collateralised Debt Obligation. This will lock up the AAs probably for good and those who do not want to sell at below par may way feel they have to just so they are not left with a falling asset. Provided a lender who wishes to sell their Access holding quickly (at a discount) can only do so if there’s a willing buyer for it, there should be no adverse impact on those who prefer to withdraw gradually at par.
|
|
r00lish67
Member of DD Central
Posts: 2,692
Likes: 4,048
|
Post by r00lish67 on Apr 27, 2020 15:39:42 GMT
Now then. The actual discounted worth of the QAA loan holdings, that will be an interesting one. What happens though if someone with no current QAA holdings were to, say, buy just £100 of the QAA at a 5% discount in their freshly minted QAA? In the current bottom-up payout mechanism, they would have their holding relatively quickly redeemed at par when the handle is cranked and make a quick fiver plus a bit of interest. That really doesn't seem fair, so would the mechanism be changing to proportional alongside this change? If the answer is "we hadn't thought of that" then just take a quick look at the picture below and I'll delete this post.  |
|
iRobot
Member of DD Central
Posts: 1,680
Likes: 2,477
|
Post by iRobot on Apr 27, 2020 15:39:45 GMT
I really do not want to see an SM in AA holdings, this breaks the primary concept of AAs, I do not want this turning into some sort of Structured Financial Instrument AKA Collateralised Debt Obligation. This will lock up the AAs probably for good and those who do not want to sell at below par may way feel they have to just so they are not left with a falling asset. You do not have to use it. The withdrawal queue will remain in place in parallel.In its current format? Or will it revert to its pre-CV19 structure?
|
|
alender
Member of DD Central
Posts: 981
Likes: 683
|
Post by alender on Apr 27, 2020 15:44:38 GMT
I really do not want to see an SM in AA holdings, this breaks the primary concept of AAs, I do not want this turning into some sort of Structured Financial Instrument AKA Collateralised Debt Obligation. This will lock up the AAs probably for good and those who do not want to sell at below par may way feel they have to just so they are not left with a falling asset. Provided a lender who wishes to sell their Access holding quickly (at a discount) can only do so if there’s a willing buyer for it, there should be no adverse impact on those who prefer to withdraw gradually at par. IMO this is a very bad move, it will stop any money not mater how little entering in AAs as who would place money in the AAs directly when they can buy in at a discount. It will slow the already glacial rate of withdraws even more.
Converting AA holding to MLA with the addition of your potion of the PF I believe is a better idea, you can then at lease get benefit from higher interest rate and full amount of any repayments, however AC would then be stuck as there is no one to fund the future tranches of the loans.
|
|
agent69
Member of DD Central
Posts: 6,042
Likes: 4,437
|
Post by agent69 on Apr 27, 2020 15:45:39 GMT
So the latest numbers from Stuart allow us to see the full extent of the money looking to exit the platform On the MLA there are £83m of loans up for sale - this is easily obtainable from the loan book download. Stuarts latest release says "over 75% remain invested in the access accounts" - If it was anything much over 75% he would have no hesitation in using the higher number so its reasonable to assume 25% of the access accounts are exiting. The access account total is £215m, 25% of which is £54m £83m + £54m = £137m that is the amount of money leaving the platform Ok. First of all the £83m includes sums being released by the access accounts so its not £83m +£54m, its just £83m. Second much of the £83m has been available since the loans drawdown as the access accounts always make the bulk of their holdings available on the market as part of the day to day account operation so the £83m isn't evidence of the sums looking to leave the platform. Third RMs point - selling isnt leaving Fourth stuarts post references investors, not cash so no value can be extrapolated from that statement as 25% could represent any % of the cash Fifth, withdrawal requests isn't defined, does it include requests to exit the accounts to invest in MLA, requests to exit the QAA to invest in 90DAA/30DAA or any permutation of inter account transfers so again nothing can be extrapolated from this statement Edit Sixth CBs point 7th - I don't think we ever got to the bottom of what the phrase "remain invested" means, so over 75% remaining invested could still mean 100% in the queue for the door?
|
|
