rscal
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Post by rscal on Oct 13, 2020 19:22:18 GMT
Friendly suggestion... can we get back on topic, maybe move to a new thread for other discussion? (I blame Stuart for starting it...). My 'limit buy' was hit today as follows
13/10/2020, 15:32 @7.5%
currently [20.20] back down @6.4% so I wonder how high it went?
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ashtondav
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Post by ashtondav on Oct 14, 2020 10:18:26 GMT
Didn’t get up to 8.1%.
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rogedavi
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Post by rogedavi on Oct 14, 2020 13:31:35 GMT
Just had a quick look at what I am actually holding in the Access accounts just to see if 6.5% discount actually seems reasonable. Here is my back of the fag packet calculation.
| Holdings | Capital Valuation | PV | | Cash | 11.5% | 100% | 11.5% | | Default | 11.6% | 81.1% | 9.4% | | Iffy | 22.9% | 100% | 20.8% | | Okay | 54% | 100% | 54% | | Total | 100% | - |
95.6% |
Its pretty simplistic but all I have done is look at the breakdown of the holdings (cash, default=suspended, iffy=monitoring, and the rest). Multiplied loans in default by the capital valuation (presumably this is the recovery rate), and assumed half of the iffy will go into default and half will be okay. This suggests a fair discount of ~4.5%. A few things i was unsure about were how the provision fund comes into play, and why indeed they are holding 11.5% in cash when there is supposed to be no liquidity at this time. Interested to hear peoples thoughts. |
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alender
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Post by alender on Oct 14, 2020 14:15:06 GMT
Just had a quick look at what I am actually holding in the Access accounts just to see if 6.5% discount actually seems reasonable. Here is my back of the fag packet calculation.
| Holdings | Capital Valuation | PV | | Cash | 11.5% | 100% | 11.5% | | Default | 11.6% | 81.1% | 9.4% | | Iffy | 22.9% | 100% | 20.8% | | Okay | 54% | 100% | 54% | | Total | 100% | - |
95.6% |
Its pretty simplistic but all I have done is look at the breakdown of the holdings (cash, default=suspended, iffy=monitoring, and the rest). Multiplied loans in default by the capital valuation (presumably this is the recovery rate), and assumed half of the iffy will go into default and half will be okay. This suggests a fair discount of ~4.5%. A few things i was unsure about were how the provision fund comes into play, and why indeed they are holding 11.5% in cash when there is supposed to be no liquidity at this time. Interested to hear peoples thoughts. The cash is a very good question which I have tried to get Stuart to answer a number of times, it may be to pay future loan tranches but these should be tailing off from the figures worked out by one of the regular posters and this should be more than covered by loan repayments even taking a pessimistic view. Again I would like to know from AC how much they have committed of AA funds to future tranches which again I have asked a number of times with no answer. A certain amount of cash would need to be kept just in case there is a huge rise in defaults but this seems too much but without AC giving us the information we can only guess. However the cash keeps on rising which I believe AC intend to use to start new lending which AC have already stated they are considering, so they can get commissions.
If some or most of the cash was distributed to lenders then the interest rate on the AAs could be increased as there would be the same interest coming in for a smaller amount invested, it may also help narrow the discount as some people would recycle the money back into the AAs at a discount as is currently happening.
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Post by stuartassetzcapital on Oct 14, 2020 15:06:13 GMT
Just had a quick look at what I am actually holding in the Access accounts just to see if 6.5% discount actually seems reasonable. Here is my back of the fag packet calculation.
| Holdings | Capital Valuation | PV | | Cash | 11.5% | 100% | 11.5% | | Default | 11.6% | 81.1% | 9.4% | | Iffy | 22.9% | 100% | 20.8% | | Okay | 54% | 100% | 54% | | Total | 100% | - |
95.6% |
Its pretty simplistic but all I have done is look at the breakdown of the holdings (cash, default=suspended, iffy=monitoring, and the rest). Multiplied loans in default by the capital valuation (presumably this is the recovery rate), and assumed half of the iffy will go into default and half will be okay. This suggests a fair discount of ~4.5%. A few things i was unsure about were how the provision fund comes into play, and why indeed they are holding 11.5% in cash when there is supposed to be no liquidity at this time. Interested to hear peoples thoughts. Not sure the 'Iffy' calculation is correct - PV should be 22.9% shouldn't it ? Also not sure of the logic in ignoring the millions of pounds of PF cash when calculating this table and whether a discount should apply. Capital valuation reductions are ringfenced in cash. So what is the true Default PV would be my question?
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ceejay
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Post by ceejay on Oct 14, 2020 17:56:54 GMT
Just had a quick look at what I am actually holding in the Access accounts just to see if 6.5% discount actually seems reasonable. ... Interested to hear peoples thoughts. Not sure the 'Iffy' calculation is correct - PV should be 22.9% shouldn't it ? Also not sure of the logic in ignoring the millions of pounds of PF cash when calculating this table and whether a discount should apply. Capital valuation reductions are ringfenced in cash. So what is the true Default PV would be my question? Fair point, Stuart, about the PF cash ... but the logic of ignoring it in this calculation is that you've not yet found a way to convey to us what its impact on the calculation actually is. Rog's calculation, while definitely iffy, is the sort of fag-packet workings that we are all being driven to at the moment. In this and other threads various opinions are expressed on what a fair value is, but as far as I can tell none of them are based on anything more sophisticated than what we've just seen. In the absence of good data, we are basically all just guessing.
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ian
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Post by ian on Oct 14, 2020 20:32:33 GMT
The bottom line is revised Access accounts are too complex for a retail investor to analyse the asset value given : a) The unknown state of the loans, the amount invested in each loan & the unfunded commitments to future tranches.
WHY DO YOU PURPOSELY HIDE THIS INFORMATION FROM INVESTORS STUART? Why won’t you answer the questions - How much exposure do the access accounts have to further tranche funding? At what date do you envisage all redeemed capital will be returned to investors rather than used to fund further tranches? Presumably you’ve modelled it - please share the information.
The access accounts; now a tradable instrument, are further shrouded in ambiguity given the lack of rules/reporting and auditing, and the fact it appears the Secondary Market can be opened/suspended and closed at any time.
At least a punt at the roulette table only has just 37 variables !!!
PS Isn’t it about time you renamed the accounts - surely there is some sort of breach of trade descriptions? At the present run rate the accounts they are closer to a 3000 day access account? Please feel free to correct me if I’m wrong.
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Post by drphil on Oct 15, 2020 8:37:29 GMT
closer to a 3000 day access account? Please feel free to correct me if I’m wrong. ...and change the wording of banner on the landing page to reflect this sort of timescale. To merely say "slower than usual" is grossly misleading (IMO). It's like describing a river that has burst it's banks and flooded the fields for a quarter of a mile on either side as "higher than usual"!
(I know some other platforms are guilty of the same thing, but that doesn't justify it of course)
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Post by herringbone on Oct 15, 2020 11:01:48 GMT
...and change the wording of banner on the landing page to reflect this sort of timescale. To merely say "slower than usual" is grossly misleading (IMO). It's like describing a river that has burst it's banks and flooded the fields for a quarter of a mile on either side as "higher than usual" (I know some other platforms are guilty of the same thing, but that doesn't justify it of course) Yes, that's definitely grossly misleading: and yes, they're not the only ones.
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rogedavi
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Post by rogedavi on Oct 15, 2020 11:24:03 GMT
I think with regards to the defaulted there is an argument to write it off completely as there is no time boxing or enforcement on the collateral.
AC will say things like there is security, and its covered by the provision fund.
But look at something like D****** M***** - there has been no appetite for enforcement and the can is perpetually kicked down the road.
And even if there is a resolution, its often stated that the provision fund is discretionary so can we really count on it to make defaults whole?
There is a huge disparity between what AC say, and what they actually deliver.
If we believe everything AC say at face value, there would be 0% discount (or even a premium) in the loan book as it is on paper overcollateralized from the outset.
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mrsb
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Post by mrsb on Oct 15, 2020 12:24:05 GMT
.... meanwhile, discount appears to be moving higher ....
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ashtondav
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Post by ashtondav on Oct 15, 2020 14:18:56 GMT
.... meanwhile, discount appears to be moving higher .... Jolly good. Those pesky sellers were trying to get it down below 5%. I reckon most of us buyers want it north of 8%. I’ve got quite a wedge building up between 8% and 9%.
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Post by Harland Kearney on Oct 15, 2020 14:21:40 GMT
.... meanwhile, discount appears to be moving higher .... I believe its a reaction to the increase of "lockdowns", maybe I'm stating the obvious although this was inevitable obviously. The new normal for sometime. Interestingly, when the stock market is down, the discounts increase & vice versa. General sentiment I'm thinking.
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Post by Badly Drawn Stickman on Oct 16, 2020 6:04:40 GMT
I notice this briefly touched 8% late yesterday evening.
This was by observation as opposed to purchase so I have no idea what sort of volume was involved.
Not enough to interest me I am afraid, but seem to recall somebody claiming to have a 'big wedge' in that area (just sounds painful to me).
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ashtondav
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Post by ashtondav on Oct 16, 2020 7:13:39 GMT
Yes, most of mine is at higher rates but I got some at 8%. My 8.5%+ bids remained unfilled.
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