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Post by RateSetter on Aug 3, 2020 7:08:35 GMT
Good morning. Today, Metro Bank has announced that it is acquiring RateSetter. We have published a blog and RateSetter Notice, copied below for ease of reference: |
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adrian77
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Post by adrian77 on Aug 3, 2020 7:22:36 GMT
is it me or is this not wonderful news for we investors?
I thank you.
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Greenwood2
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Post by Greenwood2 on Aug 3, 2020 7:23:24 GMT
Good morning. Today, Metro Bank has announced that it is acquiring RateSetter. We have published a blog and RateSetter Notice, copied below for ease of reference: I think this is good news, but will this stop or fuel the rush to sell loans?
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invester
P2P Blogger
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Post by invester on Aug 3, 2020 7:29:24 GMT
Ratesetter will probably continue to exist, but only to borrowers.
The 'nothing will change for investors' is quite true in the short-term but I think they know this isn't true longer-term. From the point of view of the end customer they don't care where the money is coming from, so given that, why share the profit?
In terms of business it is a bit like two drunks propping each other up. One thing they have in common is that they are both fallen stars, having most of their valuations in the past couple of years.
If you're gonna sell your UK operation for c.£11.5m that isn't really a great indictment of its prospects, or a belief it will deliver something genuinely innovative or useful.
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adrian77
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Post by adrian77 on Aug 3, 2020 7:32:56 GMT
From a financial feed company
hopefully this means all RS RYI income will be used to pay down our loans? Hopefully the flight of funds will decrease (I am certainly more confident now)
but I can still foresee very slow return of funds - prefer that to RS going under!
oh well - time for work but this is a good start to my week so hopefully I am not deluding myself...
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Greenwood2
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Post by Greenwood2 on Aug 3, 2020 7:36:22 GMT
Ratesetter will probably continue to exist, but only to borrowers. The 'nothing will change for investors' is quite true in the short-term but I think they know this isn't true longer-term. From the point of view of the end customer they don't care where the money is coming from, so given that, why share the profit? In terms of business it is a bit like two drunks propping each other up. One thing they have in common is that they are both fallen stars, having most of their valuations in the past couple of years. If you're gonna sell your UK operation for c.£11.5m that isn't really a great indictment of its prospects, or a belief it will deliver something genuinely innovative or useful. Reading further may be not such good news for lenders it seems the RS platform will not be funding future loans (once the deal is done) Metro Bank will and Metro Bank will take no responsibility for current loans, so does that mean wind down of the RS retail lending platform?
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Post by Deleted on Aug 3, 2020 7:38:58 GMT
For 5-Year investors it is probably a good thing - the risk of platform failure has decreased significantly. The deal is not due to complete until 4Q so anyone who wants out early will probably be able to exit (minus the fee of course).
For Access-style investors, not so great... no new money flow into the existing loan book once MetroBank takes over means they will probably become de-facto term investors, but at a bad rate of interest compared to actual term investors.
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iRobot
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Post by iRobot on Aug 3, 2020 7:39:33 GMT
Metro Bank: Dear FCA, we wish to acquire RateSetter and undertake future operations under our banking licence, effectively ending consumer exposure to lending via the P2P platform. Are you OK with that? FCA: HELL, YEAH!! 
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chris1200
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Post by chris1200 on Aug 3, 2020 7:45:43 GMT
For Access-style investors, not so great... no new money flow into the existing loan book once MetroBank takes over means they will probably become de-facto term investors, but at a bad rate of interest compared to actual term investors. So we’re basically presuming that, come acquisition, re-investment from existing investors will no longer be allowed? I guess it does seem that way on the face of it... Then bye-bye RYIs!
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Greenwood2
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Post by Greenwood2 on Aug 3, 2020 7:45:51 GMT
For 5-Year investors it is probably a good thing - the risk of platform failure has decreased significantly. The deal is not due to complete until 4Q so anyone who wants out early will probably be able to exit (minus the fee of course). For Access-style investors, not so great... no new money flow into the existing loan book once MetroBank takes over means they will probably become de-facto term investors, but at a bad rate of interest compared to actual term investors. Who's going to be buying any RS loans, if the platform is effectively in wind down? Edit:Crossed with above
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Post by Deleted on Aug 3, 2020 7:47:45 GMT
Who's going to be buying any RS loans, if the platform is effectively in wind down? Edit:Crossed with above THE DEAL IS NOT DUE TO COMPLETE UNTIL 4Q! RateSetter will be operating as currently until then. At the rate the 5-Year queue is currently moving, that is likely to be plenty of time to exit for 5-Year investors.
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Greenwood2
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Post by Greenwood2 on Aug 3, 2020 7:56:54 GMT
Who's going to be buying any RS loans, if the platform is effectively in wind down? Edit:Crossed with above THE DEAL DOES NOT COMPLETE UNTIL 4Q! RateSetter will be operating as currently until then. At the rate the 5-Year queue is currently moving, that is plenty of time to exit for 5-Year investors. Once everyone knows that RS is closing it's doors lenders will mostly be removing funds rather than re-investing or adding funds (particularly with the current interest rate haircut). I would think there will be very little lender funds available for new loans or RYI.
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iRobot
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Post by iRobot on Aug 3, 2020 8:03:01 GMT
Good morning. Today, Metro Bank has announced that it is acquiring RateSetter. On a serious note, such acquisitions can often lead to redundancies within the companies involved - particularly the company being acquired - as 'efficiencies' are sought by the new parent. Thoughts are with RateSetter employees who are probably (even more) concerned about their future given today's announcement and fearful that they may find themselves on the wrong end of that efficiency equation. Hopefully Metro Bank / RateSetter management are fulfilling their responsibilities in managing that aspect of the process, not least given the bleak economic backdrop we are currently experiencing. With livelihoods on the line, perhaps lenders can take a moments pause to consider some of the less obvious ramifications of today's news.
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Post by turton on Aug 3, 2020 8:05:50 GMT
From The Stock Market announcement:
Following completion, Metro Bank will use its deposit base to fund all new unsecured personal loans originated via the RateSetter platform on Metro Bank's balance sheet.
RateSetter will continue to manage the existing RateSetter loan portfolio and Provision Fund on behalf of its existing peer-to-peer investors, with Metro Bank assuming no credit risk for these existing loans.
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Post by Deleted on Aug 3, 2020 8:07:27 GMT
Once everyone knows that RS is closing it's doors lenders will mostly be removing funds rather than re-investing or adding funds (particularly with the current interest rate haircut). I would think there will be very little lender funds available for new loans or RYI. And yet, 5-Year reinvestment is happening right now with the haircut, and the announcement actually reduces the risk of total platform failure. Access investors may not have understood they were making a long-term 5-Year investment. But 5-Year investors would have to be pretty feebleminded not to understand, given the product is clearly labelled '5-Year'. Anyway, we shall see soon enough. But RateSetter cannot just shut down operations, otherwise they will be up sh!t creek if the deal falls through, which is still possible.
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