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Post by solicitorious on Mar 20, 2015 13:10:00 GMT
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bugs4me
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Post by bugs4me on Mar 20, 2015 15:44:43 GMT
Thanks solicitorious - invaluable information. As an aside, I hope there's been a few donations to the charity you requested.
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webwiz
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Post by webwiz on Mar 20, 2015 18:50:19 GMT
For folks as slow as me could you provide a little explanation?
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david42
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Post by david42 on Mar 20, 2015 21:37:19 GMT
I think it has been mentioned before that the LTV on PBL004b is 70% not the 48.5% in your spreadsheet because PBL004a (£1,455K) and PBL004b (£645K) share the same £3,000k security. Total loan £2,100k which is 70% of the £3,000k security.
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Post by solicitorious on Mar 20, 2015 22:15:21 GMT
For folks as slow as me could you provide a little explanation? I thought it would be useful to show the whole SS loanbook ranked by LTV risk, and calculate the critical values, LTV0, LTV50 and LTV90. LTV0: The % the security would have to fall to, to lose all of your investment. LTV50: The % the security would have to fall to, to lose half of your investment. LTV90: The % the security would have to fall to, to lose 10% of your investment. I've calculated these figures both without and with the Provision Fund. The conclusions I draw are that the LTV risks for all loans are on the minimal side. In the event of a default it looks like the chance of any capital loss is very low, and a serious capital loss virtually non-existent. Saving Stream are to be congratulated for not exposing lenders to such risks. LTVs are however just ONE aspect of the risks involved in lending. Would welcome others' comments, of course.
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Post by solicitorious on Mar 20, 2015 22:33:11 GMT
I think it has been mentioned before that the LTV on PBL004b is 70% not the 48.5% in your spreadsheet because PBL004a (£1,455K) and PBL004b (£645K) share the same £3,000k security. Total loan £2,100k which is 70% of the £3,000k security. Are you saying 4a & 4b are essentially one loan, and would be treated as such in the event of default?
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webwiz
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Post by webwiz on Mar 20, 2015 23:03:06 GMT
Thanks solicitous for this useful info. What strikes me immediately is that a default on a major loan where the fire sale of the asset brings in substantially less than the loan amount would wipe out the PF. If it was a one off due to unique factors it might not be so serious, but if it was a symptom of a property crash or a credit crunch or whatever the next horror the future holds, we could be in hot water. Or is it a cold bath?
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Post by solicitorious on Mar 20, 2015 23:21:05 GMT
Yes, there is only ONE provision fund of course, but the LTVs seem quite forgiving without it.
Systemic property risk is another risk, but at least Saving Stream appear to have minimized the risk for any particular loan, under "normal" circumstances.
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ilmoro
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Post by ilmoro on Mar 20, 2015 23:41:55 GMT
I think it has been mentioned before that the LTV on PBL004b is 70% not the 48.5% in your spreadsheet because PBL004a (£1,455K) and PBL004b (£645K) share the same £3,000k security. Total loan £2,100k which is 70% of the £3,000k security. Are you saying 4a & 4b are essentially one loan, and would be treated as such in the event of default? Probably best to consider them as 1st & 2nd tranches as they are due to end 3 months apart. They are secured by a joint 1st charge on the same property.
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rogerbu
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Post by rogerbu on Mar 21, 2015 10:20:05 GMT
Are you saying 4a & 4b are essentially one loan, and would be treated as such in the event of default? Probably best to consider them as 1st & 2nd tranches as they are due to end 3 months apart. They are secured by a joint 1st charge on the same property. As a PBL004b investor. I was very clearly aware that PBL004a & PBL004b were against the same security and that the effective LTV was around 70% not 50%. SS had made that information clear to me.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Mar 21, 2015 12:30:24 GMT
Probably consider them as 1st & 2nd tranches as they are due to end 3 months apart. They are secured by a joint 1st charge on the same property. As a PBL004b investor. I was very clearly aware that PBL004a & PBL004b were against the same security and that the effective LTV was around 70% not 50%. SS had made that information clear to me. I wouldnt say the information is clear but it is available without too much searching. Neither the loan list or overview which lenders see first give the correct LTV, the joint loan is mentioned in descriptions & correct LTV only in the document. That said I would hope that anyone lending through P2P would have the wit to realise the B indicates another loan & to read all info provided.
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Post by solicitorious on Mar 21, 2015 13:40:57 GMT
Are you saying 4a & 4b are essentially one loan, and would be treated as such in the event of default? Probably best to consider them as 1st & 2nd tranches as they are due to end 3 months apart. They are secured by a joint 1st charge on the same property. So what figures would you recommend changing in the sheet? I will then recalculate the LTV50, etc...
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david42
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Post by david42 on Mar 21, 2015 18:54:21 GMT
One option would be to split the £3,000k security value between the two loans secured against it, so reduce the PBL04b security in cell G28 from 3,000 to 2,075 and change the LTV in cell S28 to 70.12%. That would be consistent with the entries against PBL04a which lists a security value of £925k and an LTV of 69.73%.
David
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mikes1531
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Post by mikes1531 on Mar 23, 2015 17:59:42 GMT
I thought it would be useful to show the whole SS loanbook ranked by LTV risk, and calculate the critical values, LTV0, LTV50 and LTV90. LTV0: The % the security would have to fall to, to lose all of your investment. LTV50: The % the security would have to fall to, to lose half of your investment. LTV90: The % the security would have to fall to, to lose 10% of your investment. I've calculated these figures both without and with the Provision Fund. <snip> Would welcome others' comments, of course. : Thanks for making your work available -- it's a very useful way to look at things. Some thoughts... - I was having trouble verifying the calculations until I realised that Column Q, which is labelled "Hard Assets", is not that at all -- it's really the loan amount.
- Once I started using the contents of Cols. G or J as the asset value I was able to come a lot closer to the LTV0, LTV50, or LTV90 values shown, though I'm still off in the figure to the right of the decimal. It may just be rounding, but the way I made the calculation, using LTV90 for PBL018 as my example, was... The loan is £525k. 90% of that is £472.5k. We would get £400.39k from the PF, which leaves £72.11k to recover from the security. Since the security has a value of £750k, we need to recover 9.6% of the asset value. (72.11/750=9.6%) The spreadsheet gives the LTV90 for PBL018 as 9.4%. What am I doing wrong?
- I find the 0% values in Cols. Z and AA a bit misleading. Carrying on with the PBL018 example... Since the PF is worth 76% of the loan amount, the worst case -- with no recovery at all from the security -- would be a 76% return of capital, so ISTM that the LTV50 with PF for this loan should be "n/a" for the same reason that the LTV0 with PF is "n/a".
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Post by solicitorious on Mar 24, 2015 10:40:22 GMT
I thought it would be useful to show the whole SS loanbook ranked by LTV risk, and calculate the critical values, LTV0, LTV50 and LTV90. LTV0: The % the security would have to fall to, to lose all of your investment. LTV50: The % the security would have to fall to, to lose half of your investment. LTV90: The % the security would have to fall to, to lose 10% of your investment. I've calculated these figures both without and with the Provision Fund. <snip> Would welcome others' comments, of course. : Thanks for making your work available -- it's a very useful way to look at things. Some thoughts... - I was having trouble verifying the calculations until I realised that Column Q, which is labelled "Hard Assets", is not that at all -- it's really the loan amount.
- Once I started using the contents of Cols. G or J as the asset value I was able to come a lot closer to the LTV0, LTV50, or LTV90 values shown, though I'm still off in the figure to the right of the decimal. It may just be rounding, but the way I made the calculation, using LTV90 for PBL018 as my example, was... The loan is £525k. 90% of that is £472.5k. We would get £400.39k from the PF, which leaves £72.11k to recover from the security. Since the security has a value of £750k, we need to recover 9.6% of the asset value. (72.11/750=9.6%) The spreadsheet gives the LTV90 for PBL018 as 9.4%. What am I doing wrong?
- I find the 0% values in Cols. Z and AA a bit misleading. Carrying on with the PBL018 example... Since the PF is worth 76% of the loan amount, the worst case -- with no recovery at all from the security -- would be a 76% return of capital, so ISTM that the LTV50 with PF for this loan should be "n/a" for the same reason that the LTV0 with PF is "n/a".
1. Well, it's the quantum of the hard assets upon which the loan is secured. The actual hard asset values can be found in cols G, J (and M if it should become applicable for a future loan) 2. Yes, this is because the PF value has changed slightly in recent days. It went down about 3k, IIRC after some boats were redeemed early, which seemed a bit pointless. I have to calculate these values externally then paste them back into the sheet, which I have now done. 3. Well, I was trying to show that your can't lose all of your investment on any loan (at least by virtue of a single failure covered by the PF). When zero, the LTV50 and LTV90 figures should probably be construed as guaranteeing "at least" these returns for the zero realization figure. Have we reached a consensus on how 4a and 4b are to be treated?
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