ian
Posts: 342
Likes: 226
|
Post by ian on Dec 3, 2020 20:36:05 GMT
Lets not get too excited a £1 here £20 there; but sales are registering along with redeemed capital & interest.
Anyone shed light how this occurs in closed accounts ?
It’s not really material, however from a technical perspective how is this occurring.... maybe it’s orders from the MLA’s; can anyone shed any light on this ?
|
|
dead-money
Rocket to the Moon
Posts: 736
Likes: 645
|
Post by dead-money on Dec 3, 2020 21:35:46 GMT
Lets not get too excited a £1 here £20 there; but sales are registering along with redeemed capital & interest. Anyone shed light how this occurs in closed accounts ? It’s not really material, however from a technical perspective how is this occurring.... maybe it’s orders from the MLA’s; can anyone shed any light on this ? Access Accounts can also buy eligible loan parts, not just Manual Lending Account.
|
|
ian
Posts: 342
Likes: 226
|
Post by ian on Dec 4, 2020 8:07:31 GMT
Lets not get too excited a £1 here £20 there; but sales are registering along with redeemed capital & interest. Anyone shed light how this occurs in closed accounts ? It’s not really material, however from a technical perspective how is this occurring.... maybe it’s orders from the MLA’s; can anyone shed any light on this ? Access Accounts can also buy eligible loan parts, not just Manual Lending Account. Oh dear ... so AA investors effectively purchase (possibly against their will) loans ‘fixed in value & allocated to investors’ returning them 6 plus %, and are give a return of 4% in a convoluted ever moving financial structure - wish I hadn’t asked. Thankyou for your response though.
|
|
alender
Member of DD Central
Posts: 955 
Likes: 645
|
Post by alender on Dec 4, 2020 9:37:12 GMT
Access Accounts can also buy eligible loan parts, not just Manual Lending Account. Oh dear ... so AA investors effectively purchase (possibly against their will) loans ‘fixed in value & allocated to investors’ returning them 6 plus %, and are give a return of 4% in a convoluted ever moving financial structure - wish I hadn’t asked. Thankyou for your response though. As these loans are being passed between AC's accounts when the loan hits the AA accounts does anyone know where is the contribution for the PF coming from, if so do we know how much. If the PF is not being increased then the risk to AA holders is increasing.
|
|
|
|
Post by Ace on Dec 4, 2020 9:52:20 GMT
Oh dear ... so AA investors effectively purchase (possibly against their will) loans ‘fixed in value & allocated to investors’ returning them 6 plus %, and are give a return of 4% in a convoluted ever moving financial structure - wish I hadn’t asked. Thankyou for your response though. As these loans are being passed between AC's accounts when the loan hits the AA accounts does anyone know where is the contribution for the PF coming from, if so do we know how much. If the PF is not being increased then the risk to AA holders is increasing. When loans are held by the access accounts the PF contribution comes from any interest paid above the access account rate.
|
|
alender
Member of DD Central
Posts: 955
Likes: 645
|
Post by alender on Dec 4, 2020 10:04:57 GMT
As these loans are being passed between AC's accounts when the loan hits the AA accounts does anyone know where is the contribution for the PF coming from, if so do we know how much. If the PF is not being increased then the risk to AA holders is increasing. When loans are held by the access accounts the PF contribution comes from any interest paid above the access account rate. Then this looks like an increase risk to AA holders, loans are not likely to default in the early stages adding extra money to the PF so on average the PF will receive more money from loans taken on for the full lifetime than ones pick up part way through their life. Also if these loans were taken on pre covid their risks will on average be greater now but not reflected in the interest rate.
This looks at a back door method for AC to still use the AAs for lending, it seems that AC will do all it can not to return AA investors funds.
|
|
|
|
Post by Ace on Dec 4, 2020 10:24:58 GMT
When loans are held by the access accounts the PF contribution comes from any interest paid above the access account rate. Then this looks like an increase risk to AA holders, loans are not likely to default in the early stages adding extra money to the PF so on average the PF will receive more money from loans taken on for the full lifetime than ones pick up part way through their life. Also if these loans were taken on pre covid their risks will on average be greater now but not reflected in the interest rate.
They are fair points. On the other hand one could argue that loans that have performed through the covid crisis have proven themselves and are more likely to pay back in full.
This looks at a back door method for AC to still use the AAs for lending, it seems that AC will do all it can not to return AA investors funds.
Again, this seems like a fair point, but we really don't know what's going on here. It could be that the Access Accounts are reducing risk by selling higher risk loans to MLA investors that are willing to take the risk. See my in-line comments in blue. I'm not necessarily trying to defend AC here, just playing devil's advocate with an alternative interpretation.
|
|
alender
Member of DD Central
Posts: 955
Likes: 645
|
Post by alender on Dec 4, 2020 10:40:14 GMT
Then this looks like an increase risk to AA holders, loans are not likely to default in the early stages adding extra money to the PF so on average the PF will receive more money from loans taken on for the full lifetime than ones pick up part way through their life. Also if these loans were taken on pre covid their risks will on average be greater now but not reflected in the interest rate.
They are fair points. On the other hand one could argue that loans that have performed through the covid crisis have proven themselves and are more likely to pay back in full.
This looks at a back door method for AC to still use the AAs for lending, it seems that AC will do all it can not to return AA investors funds.
Again, this seems like a fair point, but we really don't know what's going on here. It could be that the Access Accounts are reducing risk by selling higher risk loans to MLA investors that are willing to take the risk. See my in-line comments in blue. I'm not necessarily trying to defend AC here, just playing devil's advocate with an alternative interpretation. This could well be the case but the problem for me is I have lost trust in AC and just want out. It feels like AC will change the way accounts work (SM) and do what it wants when it wants with investors money without any regard to the wishes of the investors. If AC tell us what they are doing with our money and why, back up their claims with the data they have I might well feel a lot more confident.
|
|
|
|
Post by Ace on Dec 4, 2020 10:53:13 GMT
See my in-line comments in blue. I'm not necessarily trying to defend AC here, just playing devil's advocate with an alternative interpretation. This could well be the case but the problem for me is I have lost trust in AC and just want out. It feels like AC will change the way accounts work (SM) and do what it wants when it wants with investors money without any regard to the wishes of the investors. If AC tell us what they are doing with our money and why, back up their claims with the data they have I might well feel a lot more confident.
That's coming across loud and clear. To be fair, I've lost some trust in them too, just nowhere near as much as you. If you really are that desperate to get out is it not worth paying the 3ish percent discount to do so? I was happy to buy into the Access Accounts when the discounts were in double figures, so I'm happy to let mine run, even though I could get out with profit now.
|
|
alender
Member of DD Central
Posts: 955
Likes: 645
|
Post by alender on Dec 4, 2020 11:17:05 GMT
This could well be the case but the problem for me is I have lost trust in AC and just want out. It feels like AC will change the way accounts work (SM) and do what it wants when it wants with investors money without any regard to the wishes of the investors. If AC tell us what they are doing with our money and why, back up their claims with the data they have I might well feel a lot more confident.
That's coming across loud and clear. To be fair, I've lost some trust in them too, just nowhere near as much as you. If you really are that desperate to get out is it not worth paying the 3ish percent discount to do so? I was happy to buy into the Access Accounts when the discounts were in double figures, so I'm happy to let mine run, even though I could get out with profit now. I may well sell at a loss but if AC were not holding excess cash in the AAs and using some to buy into other loans I could get more of my money back. AC should concentrate on paying back investor funds under the terms of the AAs not be finding ways to tie up the money for as long as possible. After all as the name suggests these accounts should have access and if full access is not possible AC should try to give as much access as possible.
There is a saying for traders, "it does not matter what you think, it is what they think that counts", so if there is enough people with trust in AC the discounts will reduce (as been happening) or perhaps even disappear. There is also the possibility the FOM or FCA will put a stop to AC's goings on.
I also have company funds in AC and will have to pay an accountant to find out how to handle the losses thereby increasing my loss.
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,845
Likes: 11,072
|
Post by ilmoro on Dec 4, 2020 11:24:19 GMT
I struggle to see the story here
The GBBA/GEIA/PIA are in winddown which I assume means that all accounts are set to withdraw (I assume that precludes any internal rebalancing which would also explain sales) so all eligible loan holdings are are available on the market.
Buyers will be MLA, possibly AA, and maybe even institutional - same as always.
I see no reason why the AA arent operating in the markets as normal - they hold parts of all loans (except those in default prior to launch) plus cash. They will buy & sell loans to achieve their overall objective of achieving sufficient income to meet the target rate, build the PF, and act as lender to fund tranches on existing loans.
I suspect the AA may well be more active than usual as the lack of new loans and reducing loan book from redemptions means it will need to buy to achieve its objectives. Im not convinced the risk is increasing ... development loans are in many cases past the point of highest risk (noticeable how availability has dropped on many, MLA investors increasing investment?) and the majority of loans have resumed normal repayment schedules ... AA may actually be more balance as big development loans where it tended to have significant holdings have had repayments or SM sales. Income should also be increasing as forbearance unwinds so less requirement to hold high rate loans to achieve target rate.
|
|
alender
Member of DD Central
Posts: 955
Likes: 645
|
Post by alender on Dec 4, 2020 11:45:10 GMT
I struggle to see the story here The GBBA/GEIA/PIA are in winddown which I assume means that all accounts are set to withdraw (I assume that precludes any internal rebalancing which would also explain sales) so all eligible loan holdings are are available on the market. Buyers will be MLA, possibly AA, and maybe even institutional - same as always. I see no reason why the AA arent operating in the markets as normal - they hold parts of all loans (except those in default prior to launch) plus cash. They will buy & sell loans to achieve their overall objective of achieving sufficient income to meet the target rate, build the PF, and act as lender to fund tranches on existing loans. I suspect the AA may well be more active than usual as the lack of new loans and reducing loan book from redemptions means it will need to buy to achieve its objectives. Im not convinced the risk is increasing ... development loans are in many cases past the point of highest risk (noticeable how availability has dropped on many, MLA investors increasing investment?) and the majority of loans have resumed normal repayment schedules ... AA may actually be more balance as big development loans where it tended to have significant holdings have had repayments or SM sales. Income should also be increasing as forbearance unwinds so less requirement to hold high rate loans to achieve target rate. I believe the AAs should not operate in the market as normal because these are not normal market conditions as we constantly being told by AC, AC's highest priority (therefore main objective for the AAs) should be to attempt to restore normal market conditions to the AAs by increasing payouts not using the AAs as a lender of last resort. If access is restored then AC can tell us what it plans to do with AAs funds and we can make our own decisions to either accept their plans or exit under the T&Cs.
|
|
|
|
Post by Ton ⓉⓞⓃ on Dec 5, 2020 12:48:28 GMT
Oh dear ... so AA investors effectively purchase (possibly against their will) loans ‘fixed in value & allocated to investors’ returning them 6 plus %, and are give a return of 4% in a convoluted ever moving financial structure - wish I hadn’t asked. Thankyou for your response though. As these loans are being passed between AC's accounts when the loan hits the AA accounts does anyone know where is the contribution for the PF coming from, if so do we know how much. If the PF is not being increased then the risk to AA holders is increasing. If you've invested in this product then you really should know and shouldn't have to ask, unless I misunderstand your point. When loans are held by the access accounts the PF contribution comes from any interest paid above the access account rate. Then this looks like an increase risk to AA holders, loans are not likely to default in the early stages adding extra money to the PF so on average the PF will receive more money from loans taken on for the full lifetime than ones pick up part way through their life. Also if these loans were taken on pre covid their risks will on average be greater now but not reflected in the interest rate. This looks at a back door method for AC to still use the AAs for lending, it seems that AC will do all it can not to return AA investors funds.
The risk line isn't flat, it changes throughout the loan, with different risks at diff. points. Buyers beware.
Don't forget that all the overwhelming majority of loans that didn't default have helped to contribute to the PF as well.
|
|
alender
Member of DD Central
Posts: 955
Likes: 645
|
Post by alender on Dec 5, 2020 13:16:51 GMT
As these loans are being passed between AC's accounts when the loan hits the AA accounts does anyone know where is the contribution for the PF coming from, if so do we know how much. If the PF is not being increased then the risk to AA holders is increasing. If you've invested in this product then you really should know and shouldn't have to ask, unless I misunderstand your point. Then this looks like an increase risk to AA holders, loans are not likely to default in the early stages adding extra money to the PF so on average the PF will receive more money from loans taken on for the full lifetime than ones pick up part way through their life. Also if these loans were taken on pre covid their risks will on average be greater now but not reflected in the interest rate. This looks at a back door method for AC to still use the AAs for lending, it seems that AC will do all it can not to return AA investors funds.
The risk line isn't flat, it changes throughout the loan, with different risks at diff. points. Buyers beware.
Don't forget that all the overwhelming majority of loans that didn't default have helped to contribute to the PF as well.
These are good points, I must admit that I was not sure where the PF contributions come from (which is why I asked the question), I know it comes from the borrowers for some reason I thought it was in added fees. However when I invested I was less interested in the mechanism to fund the PF but the fact that it was reasonably funded, AC's track record and how much trust I had in AC.
I could be wrong but I am sure I have seen some stats that show there are less defaults at the start of loans if so this is where on average the most contributions are added to the PF.
|
|
dead-money
Rocket to the Moon
Posts: 736
Likes: 645
|
Post by dead-money on Dec 5, 2020 16:00:23 GMT
>> I suspect the AA may well be more active than usual as the lack of new loans and reducing loan book from redemptions means it will need to buy to achieve its objectives. Im not convinced the risk is increasing ... development loans are in many cases past the point of highest risk (noticeable how availability has dropped on many, MLA investors increasing investment?) and the majority of loans have resumed normal repayment schedules ... AA may actually be more balance as big development loans where it tended to have significant holdings have had repayments or SM sales. Income should also be increasing as forbearance unwinds so less requirement to hold high rate loans to achieve target rate. Sadly three out of the top ten Access Account holdings are large development loans in receivership or administration and facing substantial capital reductions.
Until new lending starts the AAs will just become more focused on the rotten apples at the bottom of the barrel, as the good ones repay.
|
|
