ian
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Post by ian on Jul 6, 2020 13:34:21 GMT
“The Capital Value on this loan has now been reduced to 0% following all property security being sold and the final proceeds received from the Administrators. The only remaining security is the Corporate Guarantee from P*** S*** Developments Limited which is in liquidation.“
ignoring the fact that the net realisable value of this loan is less than a third of the valuation! It appears investors will not receive capital repayments (GBBA & Access Accounts) from the provision fund for at least 12 months. Despite AC recognising the value of the loan is now Nil.
How can Assetz get be so far our with it’s valuations AGAIN! and given they clearly recognise that there is little chance of any material recovery - why don’t they do the right thing by beleaguered investors, some of whom funds were “invested” in the loan via the access accounts after the company went into administration!
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Post by scepticalinvestor on Jul 6, 2020 14:15:23 GMT
“How can Assetz get be so far our with it’s valuations AGAIN! and given they clearly recognise that there is little chance of any material recovery - why don’t they do the right thing by beleaguered investors, some of whom funds were “invested” in the loan via the access accounts after the company went into administration!
ian I'm not in this loan, purely through luck more than foresight.
How do you say that investors funds went into this loan after the company went into administration? I confess to not knowing the ins and outs of how AC works but surely this would not be possible?
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Post by davee39 on Jul 6, 2020 14:29:28 GMT
Yes, bad loans are purchased and traded within the Access Accounts, otherwise it would not be possible to make a full withdrawal under normal circumstances.
The bad loans are reportedly covered by ring-fenced funds which are designed to cover losses.
If the accounts had normal liquidity the failure of this loan would not be an issue.
As far as I can tell, the OP is asking that the ring fenced funds are used to make a payout to those in the withdrawal queue, as a normal repayment would.
Unfortunately Assetz are particularly opaque regarding the use of the ring fenced and provision funds. A seperate issue is that the fund for GBBA1 is
insufficient to cover expected losses and I suspect there may be a wait of several years while Assetz wait for these losses to crystalize, to ensure the fragments of the
pf are apportioned fairly.
In the current income desert a functional and properly transparent account could be very attractive. While Assetz are currently in survival mode, I hope they will be
able to develop a viable account for the future (a bit like the Access account, but with Access!).
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Post by honda2ner on Jul 6, 2020 14:41:08 GMT
The Access Accounts are a pooled investment so a few bad loans is normal, as long as enough loans still pay back then investors won't see any losses. I would expect that the amounts that were recovered by the administrator would already be back in the AA repayment pot. It's good to see a loan not dragged on for years, it's gone bad, hit taken and moved on. Just need AC to do the same with the famous #227.  AC uses RICS valuations like the rest of the property industry, it isn't perfect by any means but everybody knew this already when they did due diligence. |
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Post by crabbyoldgit on Jul 7, 2020 5:26:07 GMT
i will try again computer unfreindly
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Post by crabbyoldgit on Jul 7, 2020 5:46:40 GMT
2nd attempt, my understanding is that when this and any other loan are in serious trouble AC have to produce a figure of the expected loss and a sum sufficient has to be available in the pf and be ringfenced to enable investers to be compensated 100%.Otherwise the account would not be compliant with the fsa fair trading rules if parts of the loan were transfered to new lenders after the loan was recognised as likely to default. The interesting question is if the AC expected loss figure was much lower than actual final loss how much would the pf pay out and could investers argue that AC had been negligent in its expected loss figure, ringfenced to little funds and demand full compensation. Should the pf be seen to becoming insufficient to pay its expected losses i can not see how the automated accounts can continue to be operated as now under fsa rules.
Its a murky situation and needs a statement of the operating model from AC.
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ian
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Post by ian on Jul 7, 2020 5:48:09 GMT
“How can Assetz get be so far our with it’s valuations AGAIN! and given they clearly recognise that there is little chance of any material recovery - why don’t they do the right thing by beleaguered investors, some of whom funds were “invested” in the loan via the access accounts after the company went into administration!
ian I'm not in this loan, purely through luck more than foresight.
How do you say that investors funds went into this loan after the company went into administration? I confess to not knowing the ins and outs of how AC works but surely this would not be possible?
My Example - This loan went into administration circa 18 months ago. My only funds in the QAA are those I held in cash converted to the QAA March this year. I have funds held in the QAA invested in this loan. The company is now liquidated there will be no more funds recovered however AC will not repay capital for another 12 months and as people withdraw from the QAA your holding in this loan may increase. Pro rata your % exposure will be the same - when it was equal distributions larger investors were to be left holding the baby.
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Post by crabbyoldgit on Jul 7, 2020 6:23:21 GMT
But if my understanding is correct there will be no baby to hold as the Pf should have sufficient ringfenced funds to pay the new owners of loan parts transfered to them after default to pay their losses in full. Trouble is I do not actually believe that will happen.
1 The temptation to underestimate the expected loss figure against the probable loss to polish up the pf balance is high and the expected loss is only a guess/estimate that can explained away later as unforeseeable.
2 The funds available to the pf may not be seen as what it has now just some mythical figure of what it expected to be at the time its liabilities become payable, if that time us ever allowed to occur and when its needed the funds will be probably insufficient.
Mrc London posts and fsa dislike of pf funds are well founded and played a large part of my exit from these funds over 2 years ago, they enable the funds to look like a underwritten safe bank accounts and they are not at all.
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ian
Posts: 342
Likes: 226
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Post by ian on Jul 7, 2020 7:04:06 GMT
But if my understanding is correct there will be no baby to hold as the Pf should have sufficient ringfenced funds to pay the new owners of loan parts transfered to them after default to pay their losses in full. Trouble is I do not actually believe that will happen. 1 The temptation to underestimate the expected loss figure against the probable loss to polish up the pf balance is high and the expected loss is only a guess/estimate that can explained away later as unforeseeable. 2 The funds available to the pf may not be seen as what it has now just some mythical figure of what it expected to be at the time its liabilities become payable, if that time us ever allowed to occur and when its needed the funds will be probably insufficient. Mrc London posts and fsa dislike of pf funds are well founded and played a large part of my exit from these funds over 2 years ago, they enable the funds to look like a underwritten safe bank accounts and they are not at all. AC seem very reluctant to use the PF - clearly not wishing to use it in this case. It maybe significantly underfunded if this recovery rate is anything to go by. It also calls into question the GDV VALUATIONS for further tranche funding - none of which have been significantly reduced given the potential for a property market correction. Thankfully I only had 2 manual loans S**** D**** & This one. On the face of them quite simple in terms of valuations. D**** recovered 29% LTV THIS recovered 32% LTV. Irrespective of the RICS valuations in simple terms you struggle to see the circumstances how a ‘house’ valued @ £100k is only with £30k! It calls into question the competence & integrity of the company. The reason I got out of all manual loans bar this; when D**** went south.
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Post by davee39 on Jul 7, 2020 8:16:23 GMT
Please edit loan name in above post . Names MUST NOT be quoted on a public forum
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ian
Posts: 342
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Post by ian on Jul 7, 2020 9:01:39 GMT
Please edit loan name in above post . Names MUST NOT be quoted on a public forum Apologies however neither Loan / borrower is in existence anymore.
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Post by honda2ner on Jul 7, 2020 11:31:09 GMT
A bit OT but I think many P2P platforms are stuck between a rock and a hard place, their Access loan books will become more poisonous as some loans go bad. My guess is that a 30% write down is needed across the board although with half the economy levitating on government money the best anyone can do is guess so no platform is going to talk about it.
The AC PF seemed razor thin affairs at the best of times, covid won't have improved them.
I can't see many options available to platforms, CBILS are not designed to pay back investors so apart from making platforms more secure they are no help. Institutional lending is hiding in the same bunker most investors want into, there isn't any institutional money (or if there is it's at ludicrous interest that borrowers can't/won't pay). Like sharks that suffocate if they stop moving, many platforms will have to restart lending in the access accounts in order to bring in new loans to dilute the increased number that will go bad due to covid. I'm sure that will bring much bile and foam from outraged investors but I can't see any other way to keep the AAs functioning (as long as they do keep functioning investors don't lose a penny), it's just the withdrawal time that will stretch.
People need to make their mind up which they prefer, a capital loss or an extended withdrawal time, without an SM this one size fits all approach means AC forces everyone into the extended withdrawal time option. I wonder how many investors would prefer a capital hair cut to get out, not many I expect so be careful what you wish for. If AC declared that they have written all the loans (and investors capital) down by 30% but you can withdraw instantly again the number of happy investors could probably be counted on one hand with several fingers chopped off.
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Post by stuartassetzcapital on Jul 8, 2020 7:55:50 GMT
wanderer , your post is either negligently false or purposefully misleading to others. We reserve our legal rights if you leave it worded as it is. You can see on the public website, as all others can, the many millions of pounds in just the Access Account Provision Funds. Provision Funds are also not a guarantee, just a cushion and they are being used in all sensible cases once other avenues of recovery are fully utilised. You should refrain from making such poor quality and misleading posts. It doesn't take much effort to find the facts on our website and we have a regulatory obligation to provide detailed and correct facts and I would ask that you hold yourself to the same standards that we are held to if publishing in the public domain. No more will be said on this forum.
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