Secondary market ratings

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Deleted

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Secondary market ratings Mar 18, 2015 10:18:38 GMT

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Post by Deleted on Mar 18, 2015 10:18:38 GMT

Just starting to get involved in p2p, primarily FC but dipping into a couple of others.

What are people's opinions on the secondary markets, particularly relating to the ratings the platforms give the loans at the time of auction becoming virtually obsolete in +12 months time? Do any platforms give quarterly/annual updates on how the businesses are progressing?

Just seems like I could buy a loan in the SM that is 12 months old and have no idea if its about to default, or if it has massively picked up and a buy at 12% is actually a bargain?

longjohn

Posts: 366

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Secondary market ratings Mar 18, 2015 15:51:29 GMT

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Post by longjohn on Mar 18, 2015 15:51:29 GMT

Unfortunately FC does not require the borrower to provide ongoing accounts and credit scores for the life of the loan. You are, therefore, reliant on the data provided at the time of the loan request (which could be almost a year out of date anyway).

I happily buy £10,000 corporate bonds from a FTSE 350 company on the ORB market at 5.5% - 6.25% interest knowing I've got a 5 year history of accounts plus future interim's and finals with quarterly trading updates to follow. Not to mention a dozen analysts poring over the company's every move and reporting it in the financial press.

On FC where I can see very limited historical data and no possibility of future data I'll invest £20 at at least 9% (and preferably more) on any one company.

On the secondary market I'm a seller not a buyer.

John

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