coogaruk
Hello everyone! Anyone remember me?
Posts: 706
Likes: 464
|
Post by coogaruk on Aug 3, 2020 11:14:38 GMT
That's how it was always meant to work in the first place! Really? Then what is a RYI? Something invented in an attempt to pacify those who maybe shouldn't have invested in p2p.
(Edit: Have edited my OP to reflect that)
|
|
adrian77
Member of DD Central
Posts: 3,917 
Likes: 4,144
|
Post by adrian77 on Aug 3, 2020 11:21:25 GMT
Yes a little bit sad - I was in FC and Zopa (and FS) but pulled out as I did not like the way they were going - the directors of FC certainly cleaned-up!
Looks to me as if Metro got RS at a bargain price but I am no accountant and their accounts are too complicated for me to comment on except the bottom line which was not good although (I think) to be expected and was getting better. I agree with iRobot they will probably be redundancies which is sad but I presume Metro Bank can import RS without a lot of its staff, office and quite possibly IT costs - may have a punt on Metro bank but as of today 50-50 whether I go long or short!
Given the diffference between very low swap rates and commercial loan interest rates I am sure other companies will enter the market as we Brits are an enterprising bunch. I think both P2P companies and we lenders have learnt a lot about this new concept. Tell you what I have learnt
1) don't put a lot of money into something you don't understand
2) never forget there is no FSCS guarantee
3) be wary of p2p companies pulling a "FC" i.e. suddenly announcing a "black box" model and then there is Lendy so enough said
doubtless there will be numerous phds about why p2p companies have failed - in my experience some e.g. FS were totally clueless , had a complete lack of knowledge of the
property and financial markets and totally failed to estimate just how many loans were liable to go bad - in addition they were clearly shafted by wide-boys who never intended to repay their loans and who protected themselves with shell companies etc
Do think p2p has a future yes - but the business model still needs working on.
Will I go back in - yes but only once I am reasonably sure I am not going down the Funding Secure route again!
|
|
coogaruk
Hello everyone! Anyone remember me?
Posts: 706
Likes: 464
|
Post by coogaruk on Aug 3, 2020 11:31:50 GMT
Am I the only one who feels a little bit sad. Ratesetter was once a fun exciting British company and at one point there really was a feeling that companies such as this, and Zopa, FC etc. could be the next big tech companies and the sky was the limit. Now it seems that it will be little more than a trading name of metro banks to flog its loans. In these times we desperately need some British tech companies to compete on the world stage, not seeing it at present. Sad yes but also happy to have played a part (from a relatively early stage) in such an exciting era for personal finance.
|
|
|
|
Post by hopefulinvestor on Aug 3, 2020 11:44:34 GMT
I trust the FCA will closely scrutinise this takeover. Maybe I'm a cynic - but it will be tempting for Metro to seek an early win by taking over some of the high performing low risk existing loans and leave the poor performers with the existing lenders to carry the risk and losses.
|
|
Greenwood2
Member of DD Central
Posts: 4,376
Likes: 2,780
|
Post by Greenwood2 on Aug 3, 2020 11:47:09 GMT
Something invented in an attempt to pacify those who maybe shouldn't have invested in p2p.
(Edit: Have edited my OP to reflect that)
Your original statement implies a lack of understanding of the A/P/M product as Ratesetter do not return any interest or capital repayment to the holding account - it is automatically put on the market to be lent out to a new borrower. The way in which Ratesetter return any money in this product is via a RYI. it is different in the 1 and 5 year markets. You can also just increase your rate so that it is never matched and then withdraw unmatched funds.
|
|
|
|
Post by ruralres66 on Aug 3, 2020 11:49:23 GMT
FT says it's 12 million. "Metro Bank has agreed to buy peer-to-peer lender RateSetter in a £12m deal to boost the challenger bank’s turnround efforts by expanding into more profitable areas of consumer lending.
The bank, which opened its first branch 10 years ago last week, said on Monday it would pay £2.5m up front and a further £9.5m over the three years following completion, subject to undisclosed performance criteria...."
|
|
wapping35
Member of DD Central
Posts: 385
Likes: 210
|
Post by wapping35 on Aug 3, 2020 11:53:02 GMT
From the Metro Bank statement.
"Once RateSetter shareholders holding 60 percent of RateSetter's shares have signed or acceded to the relevant transaction documents, it is expected that RateSetter shareholders who have not signed or acceded to the transaction documents will be dragged into the transaction, resulting in Metro Bank acquiring 100 percent of RateSetter's shares at completion."
============
I am sure someone could have chosen a better phrase than "dragged into the transaction"...
|
|
chris1200
Member of DD Central
Posts: 827
Likes: 508
|
Post by chris1200 on Aug 3, 2020 11:57:34 GMT
From the Metro Bank statement. "Once RateSetter shareholders holding 60 percent of RateSetter's shares have signed or acceded to the relevant transaction documents, it is expected that RateSetter shareholders who have not signed or acceded to the transaction documents will be dragged into the transaction, resulting in Metro Bank acquiring 100 percent of RateSetter's shares at completion." ============ I am sure someone could have chosen a better phrase than "dragged into the transaction"... To be fair, these are literally called 'drag along' rights in corporate law
|
|
wapping35
Member of DD Central
Posts: 385
Likes: 210
|
Post by wapping35 on Aug 3, 2020 12:02:43 GMT
From the Metro Bank statement. "Once RateSetter shareholders holding 60 percent of RateSetter's shares have signed or acceded to the relevant transaction documents, it is expected that RateSetter shareholders who have not signed or acceded to the transaction documents will be dragged into the transaction, resulting in Metro Bank acquiring 100 percent of RateSetter's shares at completion." ============ I am sure someone could have chosen a better phrase than "dragged into the transaction"... To be fair, these are literally called 'drag along' rights in corporate law Glad they didn't added "kicking and screaming"... 
|
|
bt
Sir Bufton Tufton, Jean Paul Sartre Zippy, Bungle, Jeffrey Archer Andre Previn and the LSO Hello
Posts: 129
Likes: 53
|
Post by bt on Aug 3, 2020 12:07:23 GMT
Your original statement implies a lack of understanding of the A/P/M product as Ratesetter do not return any interest or capital repayment to the holding account - it is automatically put on the market to be lent out to a new borrower. The way in which Ratesetter return any money in this product is via a RYI. it is different in the 1 and 5 year markets. You can also just increase your rate so that it is never matched and then withdraw unmatched funds. Which seems to be a clever trick rather than the proper way to get your money out.
|
|
Greenwood2
Member of DD Central
Posts: 4,376
Likes: 2,780
|
Post by Greenwood2 on Aug 3, 2020 12:13:57 GMT
You can also just increase your rate so that it is never matched and then withdraw unmatched funds. Which seems to be a clever trick rather than the proper way to get your money out. Just an alternative method. It has been discussed on the forum (when the accounts were first introduced) and was the only reason I put any funds into the otherwise revolving line of lending in those products.
|
|
coogaruk
Hello everyone! Anyone remember me?
Posts: 706
Likes: 464
|
Post by coogaruk on Aug 3, 2020 12:14:57 GMT
You can also just increase your rate so that it is never matched and then withdraw unmatched funds. Which seems to be a clever trick rather than the proper way to get your money out. If you can't beat 'em... 
|
|
coogaruk
Hello everyone! Anyone remember me?
Posts: 706
Likes: 464
|
Post by coogaruk on Aug 3, 2020 12:18:47 GMT
Something invented in an attempt to pacify those who maybe shouldn't have invested in p2p.
(Edit: Have edited my OP to reflect that)
Your original statement implies a lack of understanding of the A/P/M product as Ratesetter do not return any interest or capital repayment to the holding account - it is automatically put on the market to be lent out to a new borrower. The way in which Ratesetter return any money in this product is via a RYI. it is different in the 1 and 5 year markets. I have a limited but fair understanding of Access (it has been tinkered with far too much and not in our favour since I first invested in it when it was called 'Rolling') and absolutely none whatsoever of Plus or Max as I have never touched either of those products with the proverbial barge pole, nor would I ever want to. For the sake of clarification and avoidance of doubt, etc. etc. my original statement related to the very beginnings of p2p when there was no such thing as secondary markets or getting your money out early. You simply lent money to *exceptionally* creditworthy borrowers (yes, they really did exist back then!) who paid back over the duration of the loan providing you with a decent return which was much better when compared to what the banks were offering. Since its inception, p2p has been constantly tinkered with until it became almost(?) unrecogniseable as p2p and therefore into oblivion. Some of that tinkering may have been necessary for the sake of the platform(s) continued existence (particularly true for RS I feel) because a) p2p was never going to be profitable for them or b) when it came to making money from consumer lending the banks (to a large degree at least) actually knew what they were doing. Rhydian is an ex-banker so maybe it should come as no surprise to see where RS has ended up (which kind of contradicts my previous statement) today. I will call upon 'mixed emotions' as a conditional 'get out' for most of the above garble!
|
|
|
|
Post by bouncycastle on Aug 3, 2020 12:29:33 GMT
Interesting to note that nobody (I don’t think) has mentioned that the reason this business has (basically) gone under is really because of COVID.
Prior to the outbreak, fine it had issues and was probably unlikely to ever make any serious dosh for its shareholders because of high cost of funds etc, but actually it was a liquid version of an illiquid asset class. I mean I never (until COVID) ever had to wait for funds to be released or made a loss, and I believe that is the case of 99% or so of others.
The liquidity squeeze they experienced was simply brutal. The firm wasn’t sunk by poor management or bad underwriting, but by a filthy disease. I’m sure this is the start of many casualties.
Metro have got a bargain here, but they were the best game in town as raising cash during an environment like this is next to impossible.
I feel sad for the staff of RS for sure.
|
|
Greenwood2
Member of DD Central
Posts: 4,376
Likes: 2,780
|
Post by Greenwood2 on Aug 3, 2020 12:39:26 GMT
Interesting to note that nobody (I don’t think) has mentioned that the reason this business has (basically) gone under is really because of COVID. Prior to the outbreak, fine it had issues and was probably unlikely to ever make any serious dosh for its shareholders because of high cost of funds etc, but actually it was a liquid version of an illiquid asset class. I mean I never (until COVID) ever had to wait for funds to be released or made a loss, and I believe that is the case of 99% or so of others. The liquidity squeeze they experienced was simply brutal. The firm wasn’t sunk by poor management or bad underwriting, but by a filthy disease. I’m sure this is the start of many casualties. Metro have got a bargain here, but they were the best game in town as raising cash during an environment like this is next to impossible. I feel sad for the staff of RS for sure. There was a pre-Covid thread discussing the apparently falling PF coverage, so there was already some concern, but Covid was definitely the final straw.
|
|
