QAA Secondary Market discount tracker (AC)

Interesting point.

So, there was me thinking that the SM might clear out some the the withdrawal queue and the pro-rata payments would increase for the people left. Now I realise (a bit slow on the uptake I guess) that the current set up will increase the withdrawal queue as it now makes sense for everyone to put money in the queue regardless of their long term intentions.

So essentially now anyone wanting to sit tight and wait to withdraw at PAR is competing against every other person on the platform using the PAR withdrawals to make a quick profit. 

Great....

Frankly I don't think it makes much difference. Since "normal conditions" ended (which was always going to happen at some point) and AC had their arm twisted to start making low-level capital repayments, it's made sense for every lender to have a small withdrawal request in place to receive their pro-rata share of these distributions. The only thing that will change this is when / if AC go back to running the Access Accounts as intended and re-lending all borrower capital repayments. The exit route from the Access Accounts was always via sale to another lender and, unless AC intend to put them into formal run-off, there's really no justification in making capital repayments (which can only dilute the quality of the remaining AA loan book over time).

I might have gotten the wrong end of the stick here, but....

I don't think the introduction of the AAMP will have significantly increased the size of the withdrawal queue overall.

Before the AAMP, a % of account holders will have listed some or all of their holding.  By default that will have been at par.

After the introduction of the AAMP, some of that group may have utilised the new facility and sold out. (The buyers will be a mixture of flippers and long term holders, so the withdrawal will have only partially reduced).  Some will have listed their part or all of their withdrawal amount at an 'acceptable' discount - say 3% for arguments sake - and those sums will be sitting in the withdrawal queue alongside all the rest, including those at par, as was the case pre-AAMP.

When a repayment is made, it's made equally against all queue constituents whether listed at par or not.  The withdrawal queue is still the same queue, it's just now been renamed 'Marketplace' and constituents are at varying discounts whilst some - probably the vst majority - are at par.

There may even be an argument that as AA holders can now utilise the marketplace and sell at a discount, the overall queue will have reduced as a result of that option becoming available to them. Indeed, the brief announcement from AC (via a press piece) would suggest several million - somewhere around £5-7m if I recall correctly - had been withdrawn from the queue in a short period after it's launch.

Pro rata according to how much you have in the QAA and regardless of the withdrawal amount.

Correct.

But the point regarding my understanding still remains - the introduction of the marketplace hasn't necessarily increased the size of the overall withdrawal queue.

Indeed, if AC's pronouncements are being interpreted correctly, the withdrawal queue has shortened, not lengthened.

Regardless of the current understandable unhappiness towards the Access Accounts,ie liquidity, reduction in rates, fees, is it true to say that investors in the AA's have never lost £1 of their capital invested, outside of voluntary discounting to sell ?

With FCA requirements for AC to reduce rates to bolster the Provision Fund, if required, and with Stuartassetzcapital posting that they have no plans to do so and that increasing interest rates is the probable next direction for interest rates, does selling at a 10% loss to your capital now make sense if you do not have to ?

A future actual 10% loss to the value of the AA funds equate to a loss of £22million in value of the funds from £0 today excluding the PF.

I see any discounts to invest @ 9-10% as a buying opportunity that once AA lending restarts, interest rates increase, investment flow improves, in the medium term I predict near-to-par/par will return. That does not rule out short term volatility in discount rates due to liquidity not actual value.