IFISAcava
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Post by IFISAcava on Sept 3, 2020 9:01:37 GMT
Back to discount tracking. I've finally given in and invested at 10%. Clicked mouse hesitantly though. 10% is equipoise for me taking into account defaulted loans and loss of liquidity - lower than that the seller gets the better deal, higher than that, the buyer. Just my view. And will change as things evolve. But for me, the risk of being stuck for some years would need a lot higher than 10% to invest anything significant - closer to 20-25%.
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puddleduck
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Post by puddleduck on Sept 3, 2020 9:09:02 GMT
Back to discount tracking. I've finally given in and invested at 10%. Clicked mouse hesitantly though. But for me, the risk of being stuck for some years would need a lot higher than 10% to invest anything significant - closer to 20-25%. Agreed - you only need to look at the projected Capital value on suspended loans to realise that anyone hoping for loans to pay back over time are going to be nursing losses down the line - you won't recover everything waiting for loan to repay organically. This is assuming that Access Accounts never return to 'normal' market conditions with instant and at par trading, which I think is likely. 20-25% is my buy in value too. I'll be happy to buy into MLA when new loans start filtering through.
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Post by davee39 on Sept 3, 2020 9:09:57 GMT
I have no issues with being stuck in performing loans.
However there are several bullets which need to be bitten. Starting with the infamous 227, now 3 years since a payment and as muddy as ever, as lender votes are ignored and 'new' paths pursued. Next would be those loans written down to zero. Since these are supposedly fully covered by the pf it is time this paid out, allowing any long term recoveries to go back to the pf. This would enhance the portfolio quality and put some liquidity back in the system. Just how long does it take for an actual payment from the pf?
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blender
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Post by blender on Sept 3, 2020 15:17:49 GMT
The email dated 5th Aug, the last email on the subject of interest rates, stated "To recap, the updated target rates are as follows: Quick Access Account - 3.75% p.a. 30 Day Access Account - 4.00% p.a. 90 Day Access Account - 4.10% p.a. (effective as of 1st September 2020 and remaining at 5.75% for the monthly interest payments made in June, July and August)" That email went on to inform investors that it could not meet the 90DAA target rate of 5.75% for July and retrospectively paid 5.1% for July. Since then, the only other communication was the message from Stuart on 1st September on this forum stating that some have chosen to misinterpreted the email. An email prior to taking decisions like this would have assisted in avoiding any issues. An explanation rather than accusation on 1st September's message, or since then, would have helped. Yes, that is what they have done, but it is not consistent with what they announced on June 1 'For the 90DAA, historically we had said that we would provide ninety days of notice of any change to the target rate. We will honour that commitment, even though it no longer appears in the disclosures relating to the 90DAA.' On 5 Aug they changed it to mean 90 days notice of a change in the payments, rather than a change in the rate of interest. Since the payments are a month in arrears, the 5 Aug message means that they have given the notice of a rate change a month in arrears. To be consistent they should have said on 1 June, that the notice applied to the target rate earned from 1 May. Not honest, imo. Must think were are fools.
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Post by Harland Kearney on Sept 3, 2020 16:06:54 GMT
We are seeing new volatility in the stock markets again. In the event we run into another correction, I bet this will impact discounts here as the fear volatility peaks.
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dead-money
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Post by dead-money on Sept 3, 2020 20:53:36 GMT
I'm thinking 10% might be the new normal.
FYI, Buy-in discount did touch 10.6% yesterday.
Fingers crossed AC marketing dept. can actually craft an email tomorrow which doesn't either panic or annoy the customer base 
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Post by dabeztstuff on Sept 3, 2020 20:56:34 GMT
Guys, anxiety is very catching!!
These discounts are ridiculous, I feel so sorry for the lenders selling with such a haircut.
All the loans are secured by property. The vast majority of the loans will be completely fine. A small number may default which has always been the case. But this is a small number and your risk is spread throughout the whole portfolio and your investment is spread across hundreds of loans.
Even with these defaults you will get most or all your money back over time.
The ones that are fine will more than outway BY FAR any of the small number of loans tht default. And you get paid a tidy interest the entire time!
And remember this was all caused by a virus. Business will bounce back (it already has). And it is probably under a year before a vaccine comes and then there will be a boom.
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dead-money
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Post by dead-money on Sept 3, 2020 20:59:07 GMT
Guys, anxiety is very catching!!
These discounts are ridiculous, I feel so sorry for the lenders selling with such a haircut.
All the loans are secured by property. The vast majority of the loans will be completely fine. A small number may default which has always been the case. But this is a small number and your risk is spread throughout the whole portfolio and your investment is spread across hundreds of loans.
Even with these defaults you will get most or all your money back over time.
The ones that are fine will more than outway BY FAR any of the small number of loans tht default. And you get paid a tidy interest the entire time!
And remember this was all caused by a virus. Business will bounce back (it already has). And it is probably under a year before a vaccine comes and then there will be a boom.
I shall refer the honourable gentleman to loan #227... (No interest paid for three years and zero recovery efforts by AC)
13% of QAA loans are suspended and that's before CV impact hits home, (it's more like 18% by value.)
Any new suspensions or capital revaluations may make a loan untradeable in QAA.
AC's recovery performance has been slow and lack lustre, borrowers in administration or receivership take years to yield any tangible outcome. (Just ask those stuck in the closed black box accounts, PSA, GEA, GBBA)
Property valuations have been repeatedly shown to be unrealistic, based on GDV, which can't be realised in a forced sale. (Can AC not sue the valuers, or take out insurance against valuations not been realised?)
As there is no new lending the portfolio will inevitably become more focused on the bad loans as good loans repay or refinance on better terms, such as those offered by AC itself under the CBILS scheme (not open to retail investors)
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theta
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Post by theta on Sept 3, 2020 21:25:44 GMT
I shall refer the honourable gentleman to loan #227... (No interest paid for three years and zero recovery efforts by AC) [/div]
13% of QAA loans are suspended and that's before CV impact hits home, (it's more like 18% by value.)
Any new suspensions or capital revaluations may make a loan untradeable in QAA.
[/quote] I see that loan 227 is about 0.1% of QAA holdings, with about a third of that covered by allocated cash (based on the capital valuation) so hardly an issue. But your point that all the problematic loans combined may lead to losses exceeded PF cover is valid. The key variable is new lending as you say later: As there is no new lending the portfolio will inevitably become more focused on the bad loans as good loans repay or refinance on better terms, such as those offered by AC itself under the CBILS scheme (not open to retail investors) [/div]
[/quote] New lending is what is needed for narrowing of the discount and ultimately for a return to normal conditions. At the moment there isn't any, but we are told by Stuart that they are playing to resume it.
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Post by Harland Kearney on Sept 3, 2020 21:27:46 GMT
Guys, anxiety is very catching!!
These discounts are ridiculous, I feel so sorry for the lenders selling with such a haircut.
All the loans are secured by property. The vast majority of the loans will be completely fine. A small number may default which has always been the case. But this is a small number and your risk is spread throughout the whole portfolio and your investment is spread across hundreds of loans.
Even with these defaults you will get most or all your money back over time.
The ones that are fine will more than outway BY FAR any of the small number of loans tht default. And you get paid a tidy interest the entire time!
And remember this was all caused by a virus. Business will bounce back (it already has). And it is probably under a year before a vaccine comes and then there will be a boom.
Fear isn't driven from the economy so much on this board at least I think. Its AC conduct which I think has alot of people getting cold feet (myself included) The recent 90 daa arrogance certainly has me in knots, I'm not even invested in that account...
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dead-money
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Post by dead-money on Sept 3, 2020 21:34:39 GMT
#227 was just to highlight the slowness of resolution for defaults rather than the amount held by QAA. THe AAs have their own selection of deliquents.
One trend currently seems to be for the larger dev loans to arrange future tranche drawdowns from the CBILS scheme; that at least reduces the future cash demands on the Access Accounts.
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Post by davee39 on Sept 3, 2020 22:02:36 GMT
I hope that anyone who thinks current discounts are ridiculous will be be piling in to take advantage.
My view of the property secured assetz is that unfinished development sites have minimal value. We have also seen the value of unbuilt windmills and other loans with a zero valuation.
What we have not seen is any meaningful repayment from the provision fund.
When a business model is as deeply troubled as the access accounts are I would expect to see more regular and timely communication.
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dead-money
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Post by dead-money on Sept 4, 2020 7:48:51 GMT
Wed 26/08/20 8am 8.2% / 9.9% (12% for £5K+) 10am 8.1% / 10.6% (11.6% for £5K+) Noon 8.0% / 9.6% 2pm 8.4% / 9.9% 4pm 8.3% / 10.0% (10.30% for £5K+) 6pm 8.2% / 9.9% Thu 27/08/20 8am 8.3% / 9.0%
Fri 28/08/20 3pm 8.2% / 8.9%
Sat 29/08/20 9am 8.0% / 8.3%
Sun 30/08/20 9am 8.1% / 8.5% (8.7% for £5K) 8pm 7.5%
Mon 31/08/20 10am 7.8% / 8.0% (8.3% for £5K, 8.5% for £10K) 10pm 7.6% / 8.3%
Monthly interest due
11am / 7.7%
5pm 7.9% / 8.6%
Wed 02/09/20 9am 9.0% / 9.2%
Thu 03/09/20 9am 9.1% / 9.9% Noon 9.9% / 11.1% (11.7% for £5K) 6pm 9.8% / 10.7%
Fri 04/09/20 9am 9.9% / 10.5% 8pm 9.7% / 9.9%
Sat 05/09/20 9am 9.6% / 10.1% (10.5% for £5K)
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Mikeme
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Post by Mikeme on Sept 4, 2020 8:30:20 GMT
I sold a few pounds yesterday at 6.1% at 1718. Very odd.
Withdraw £*******
(£*****) £3.59 0.00%
(6.10%) live Quick Access Account (IFISA) Cash (IFISA) 03/09/2020 17:18
Withdraw £*****
(£*****) £10.14 0.00%
(6.10%) live Quick Access Account (Standard) Cash (Standard) 03/09/2020 17:18
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SteveT
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Post by SteveT on Sept 4, 2020 9:03:03 GMT
I sold a few pounds yesterday at 6.1% at 1718. Very odd. Withdraw £******* (£*****) £3.59 0.00% (6.10%) live Quick Access Account (IFISA) Cash (IFISA) 03/09/2020 17:18 Withdraw £***** (£*****) £10.14 0.00% (6.10%) live Quick Access Account (Standard) Cash (Standard) 03/09/2020 17:18 That'll be a capital distribution from AC, pro-rata to your total QAA holding, not a sale. Click on the withdrawal instruction to see the transaction history, which will show it went through at 0.00%. It will have been deducted from your earliest withdrawal request, which you presumably offered at 6.1% discount.
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