blender
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Post by blender on Aug 21, 2020 8:38:29 GMT
£1,000 buy / sell
Thu 20/08/20 9am 5.7% / 6.0%
5pm 5.8% / 6.0%
Fri 21/08/20 9am 5.8% / 5.9% That's a good presentation. It's funny how that 'spread' has reduced since we discussed its workings here. I think that AC can claim a success for the SM in current circumstances, now that the discount has stabilised at just under 6%.
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lobster
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Post by lobster on Aug 21, 2020 11:14:40 GMT
Been having a good look through the forum on how the Lender Fee of 0.9% will impact on the QAA (if at all).
To be honest, it's doing my head in, but Stuart Law himself said that "....our Access Accounts factor in the fee" . So is this always the case, so that QAA holders, for example, should always get the full 3.75% rate paid monthly ? Thanks.
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dead-money
Rocket to the Moon
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Post by dead-money on Aug 21, 2020 11:26:02 GMT
Been having a good look through the forum on how the Lender Fee of 0.9% will impact on the QAA (if at all). To be honest, it's doing my head in, but Stuart Law himself said that "....our Access Accounts factor in the fee" . So is this always the case, so that QAA holders, for example, should always get the full 3.75% rate paid monthly ? Thanks. Whatever rate is paid monthly to Access account holdings, is after deduction of lender fee.
Whether that rate is the advertised target rate is another matter, It's not guaranteed and is entirely at AC's discretion.
Edit: When there is a shortfall of interest from lenders, AC has discretion to top-up the interest paid from the provision fund or their own resources.
For historic rates see this post p2pindependentforum.com/post/397157 and note my comments there.
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Post by stuartassetzcapital on Aug 21, 2020 13:48:56 GMT
Been having a good look through the forum on how the Lender Fee of 0.9% will impact on the QAA (if at all). To be honest, it's doing my head in, but Stuart Law himself said that "....our Access Accounts factor in the fee" . So is this always the case, so that QAA holders, for example, should always get the full 3.75% rate paid monthly ? Thanks. Whatever rate is paid monthly to Access account holdings, is after deduction of lender fee.
Whether that rate is the advertised target rate is another matter, It's not guaranteed and is entirely at AC's discretion.
For historic rates see this post p2pindependentforum.com/post/397157 and note my comments there.
The interest paid definitely isn't at our discretion - its the net available interest received that month from the loans in the AAs (after any lender fee applicable at the time and our monitoring fee) and if that is enough to pay the target rate then it is paid in full, otherwise what is received is paid out (as we did a few months ago). Any excess goes into the Provision Fund. That's how the AA's work.
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jlend
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Post by jlend on Aug 21, 2020 20:55:48 GMT
Whatever rate is paid monthly to Access account holdings, is after deduction of lender fee.
Whether that rate is the advertised target rate is another matter, It's not guaranteed and is entirely at AC's discretion.
For historic rates see this post p2pindependentforum.com/post/397157 and note my comments there.
The interest paid definitely isn't at our discretion - its the net available interest received that month from the loans in the AAs (after any lender fee applicable at the time and our monitoring fee) and if that is enough to pay the target rate then it is paid in full, otherwise what is received is paid out (as we did a few months ago). Any excess goes into the Provision Fund. That's how the AA's work. Did we also have one month where the access account Provision Funds topped up the interest rates paid to lenders? Is it possible this may happen again in the future? "Does it have a discretionary Provision Fund? Yes. There’s a separate discretionary Provision Fund to help cover any missed interest payment or capital losses, if any loans aren’t repaid."
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lobster
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Post by lobster on Aug 22, 2020 7:00:13 GMT
Whatever rate is paid monthly to Access account holdings, is after deduction of lender fee.
Whether that rate is the advertised target rate is another matter, It's not guaranteed and is entirely at AC's discretion.
For historic rates see this post p2pindependentforum.com/post/397157 and note my comments there.
The interest paid definitely isn't at our discretion - its the net available interest received that month from the loans in the AAs (after any lender fee applicable at the time and our monitoring fee) and if that is enough to pay the target rate then it is paid in full, otherwise what is received is paid out (as we did a few months ago). Any excess goes into the Provision Fund. That's how the AA's work. But surely with no new loans currently, and with existing loans continually being repaid, the net available interest received into the AA's each month will be continually decreasing ? Isn't some of the repayment capital used to pay out interest to AA lenders ?
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dead-money
Rocket to the Moon
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Post by dead-money on Aug 22, 2020 9:16:57 GMT
The interest paid definitely isn't at our discretion - its the net available interest received that month from the loans in the AAs (after any lender fee applicable at the time and our monitoring fee) and if that is enough to pay the target rate then it is paid in full, otherwise what is received is paid out (as we did a few months ago). Any excess goes into the Provision Fund. That's how the AA's work. But surely with no new loans currently, and with existing loans continually being repaid, the net available interest received into the AA's each month will be continually decreasing ? Isn't some of the repayment capital used to pay out interest to AA lenders ? Significant new tranches of existing agreements continue to be drawdown, that will continue for a year or more without any new borrowers being signed up.
Capital repayments don't go to pay lenders interest directly, however, they do top-up the provision fund, which AC has discretion to use to maintain lender's interest rates if there is a shortfall on interest received from borrowers.
(To the best of my knowledge, my current understanding of the situation today, don't hold me to it.)
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Post by scepticalinvestor on Aug 22, 2020 11:56:31 GMT
Absolutely. It's comforting to know that the current value of my holdings is only ~6% off, at least for now. £1,000 buy / sell
Thu 20/08/20 9am 5.7% / 6.0%
5pm 5.8% / 6.0%
Fri 21/08/20 9am 5.8% / 5.9% That's a good presentation. It's funny how that 'spread' has reduced since we discussed its workings here. I think that AC can claim a success for the SM in current circumstances, now that the discount has stabilised at just under 6%.
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james21
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Post by james21 on Aug 22, 2020 16:32:15 GMT
Anyone got a view at what the discount to sell is likely to settle at is say a months time? I do want to raise some cash but close to 6% loss to do so at present is more than I want to lose
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savernake
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Post by savernake on Aug 22, 2020 16:44:11 GMT
Anyone got a view at what the discount to sell is likely to settle at is say a months time? I do want to raise some cash but close to 6% loss to do so at present is more than I want to lose I'm hoping the monthly interest run on the 1st September will drive the discount down as the system places multiple buy orders. Like you, I'm looking to sell but 6% is way too high for me. I can't see it remaining at 6% forever because there will come a point when there will be nobody left who is desperate enough to sell at that price.
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Post by stuartassetzcapital on Aug 22, 2020 16:46:55 GMT
The interest paid definitely isn't at our discretion - its the net available interest received that month from the loans in the AAs (after any lender fee applicable at the time and our monitoring fee) and if that is enough to pay the target rate then it is paid in full, otherwise what is received is paid out (as we did a few months ago). Any excess goes into the Provision Fund. That's how the AA's work. But surely with no new loans currently, and with existing loans continually being repaid, the net available interest received into the AA's each month will be continually decreasing ? Isn't some of the repayment capital used to pay out interest to AA lenders ? No interest is interest and repayment capital is separate. Neither crosses over.
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lobster
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Post by lobster on Aug 22, 2020 16:51:30 GMT
Anyone got a view at what the discount to sell is likely to settle at is say a months time? I do want to raise some cash but close to 6% loss to do so at present is more than I want to lose Probably plenty with "views" out there , but ultimately everyone will be guessing. It obviously depends on unknowable factors such as what the covid 19 situation will be like, what the macroeconomy will be like, any changes to interest rates and taxation rates, any more/less institutional lending to AC, any specific changes made to the Access Accounts, especially the target interest rates, and doubtless a whole host of other factors. One possible strategy for you is to "pound cost average" out of the Access Account. For example if you ultimately wanted to sell £1,000 , you could sell £250 now (taking a 6% hit) , and then sell three more tranches of £250 at regular intervals in the future. That way, you would at least gain some protection against a big spike in discount rates, but you would have to accept that if the discount rate were to fall sharply, you would lose some of the benefit.
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dead-money
Rocket to the Moon
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Post by dead-money on Aug 22, 2020 17:31:26 GMT
Anyone got a view at what the discount to sell is likely to settle at is say a months time? I do want to raise some cash but close to 6% loss to do so at present is more than I want to lose I'm hoping the monthly interest run on the 1st September will drive the discount down as the system places multiple buy orders. Like you, I'm looking to sell but 6% is way too high for me. I can't see it remaining at 6% forever because there will come a point when there will be nobody left who is desperate enough to sell at that price. Alternatively as loans redeem or refinance elsewhere at lower Govt. backed rates, the Access accounts will be left holding an increasingly toxic collection of defaulted and suspended loans with highly reduced recovery valuations, leading to deepening of the discount by those keen to exit before the music stops.
Just one of many unknowable scenarios...
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ashtondav
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Post by ashtondav on Aug 22, 2020 18:00:49 GMT
Anyone got a view at what the discount to sell is likely to settle at is say a months time? I do want to raise some cash but close to 6% loss to do so at present is more than I want to lose I'm hoping the monthly interest run on the 1st September will drive the discount down as the system places multiple buy orders. Like you, I'm looking to sell but 6% is way too high for me. I can't see it remaining at 6% forever because there will come a point when there will be nobody left who is desperate enough to sell at that price. Based on the posts on these boards I think there are more who want to sell than want to buy. I would not expect much lower discounts.
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blender
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Post by blender on Aug 22, 2020 18:12:08 GMT
I'm hoping the monthly interest run on the 1st September will drive the discount down as the system places multiple buy orders. Like you, I'm looking to sell but 6% is way too high for me. I can't see it remaining at 6% forever because there will come a point when there will be nobody left who is desperate enough to sell at that price. Based on the posts on these boards I think there are more who want to sell than want to buy. I would not expect much lower discounts. I sold what I needed to at 5.6%. I would be happy to sell some more at half that, but am now content to let the repayments drip through and the monthly interest to go to cash - until the account is reduced somewhat. In the case of an unknown unknown happening I reckon I will be able to exit at max 6%. That I guess is a rate that is acceptable to flippers, who are also content to let the discount drift down. But at some point soon the discount will just be enough to tempt those who wish to buy and hold.
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