agent69
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Post by agent69 on Dec 12, 2015 12:26:10 GMT
Perhaps I should just eat more cheese now that the old TC cheese factory is under new management.  ![]()
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Post by stuartassetzcapital on Dec 12, 2015 12:59:00 GMT
Given there are currently only 2 loans in the upcoming loans scheduled to draw in Dec there must be a few loans already funded by institutional money on the slate to drawdown in the week before Xmas if that is the case. Not necessarily, you don't see those loans any more until we're certain drawdown is going ahead (that's the theory anyway). That is correct - we no longer list in hope of borrowers solicitors delivering on time (which they don't) - we only publicly list new loans now when they are ready to draw in a few days. The pipeline that is growing strongly is no longer visible till days before drawdown now to avoid winding people up. We have been addressing the 'poor quality of borrower solicitor' issue as well over recent months and that will be better going forwards with a new system as some loans have been delayed months by, frankly, their amateur solicitors. Loan origination has gone over £100m a month in the latter part of this year due to a substantial marketing focus by myself as head of marketing, and the large marketing team, and this is now coming through on a good conversion ratio to drawdowns. There has been a need to reduce borrower coupons as the market is getting more competitive but we are now head on with the challenger banks and have a much larger market of good quality borrowers to service now. Yes interest coupons will come down as the only deals left with high rates are a few special cases that are good quality (we still see a few) and mostly the basket cases that we and most others won't touch but do appear to be being funded 'elsewhere', we know who they are. There will be a reducing of coupon a little (to c 9-10% weighted I expect for MLIA) from last year when we managed to deliver a weighted 12% but I can tell you those rates nowadays come with baggage in most cases so please beware at those levels. Also remember that unsecured business lenders are putting out lower lender coupons for unsecured loans whereas we always have security and that matters most in a down cycle which we are now closer to than the last one. Our internal stress test results in such a situation vis a vis the Bank of England tests appear very strong, principally due to the security and even a 100% default rate would have what most would think is a very good calculated result. We do appreciate everyone's support over the years and I can tell you MLISA will continue to get access to loans and we will always keep the lender rate as close to the borrower rate as possible - meaning we just get cost covering monitoring income from that spread. Spread on investment accounts like the GBBA and GEIA is for the PF as we have a duty to protect people and will continue to increase those efforts as we are here for the long term and not just profiteering or hyping our value for the short term. We take fairer, growth, together seriously and hence this post to confirm we are not abandoning our investors for funds - quite the opposite we defend you and your market share and if money keeps flowing from retail sources we will deliver you loans. I do apologise for the slow down this year as we had to get som many big initiatives in place and move to the better quality credit sector and slightly lower rates but it has all been for the good for both lenders and equity investors.
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sandbrain
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Post by sandbrain on Dec 12, 2015 13:09:42 GMT
The QAA is a sop and there'll be no strong moving pipeline till February next year. Why are MLIA investors even bothering? Don't really know why I'm bothering. Of course I want to diversify across platforms but it looks like I might have to resign to being heavily weighted towards TC and SS. Especially with the new loan structure at SS and that things appear to be moving in the right direction at TC Towers.
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Post by stuartassetzcapital on Dec 12, 2015 13:11:52 GMT
My estimate is that lenders would be allocated a maximum of ~£1,750 but that is obviously subject to fluctuation £40 to £1,750 ish? If you were a politician this would probably be called a U-turn. We will no longer release the full loan to the market at the second of drawdown, just like many UWs drip their stock into the market. We brought forwards some more release today and will release more of this loan in the future too. The system is moving to automatic releases and we over-rode that today to bring more to market faster given the low supply recently. Sorry for any confusion this caused and as we deliver more loans now this problem should dissipate, I sincerely hope so.
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Post by chris on Dec 12, 2015 13:13:25 GMT
So what we're learning is that the reason the QAA needed to take a big slice of this loan was to pay the bill on the QAA. Of course if AC hadn't increased the QAA from £1mm to £3.5mm then the bill wouldn't have been so large. And they also tell us that the QAA is about to get bigger. Fantastic, lets all cheer! I suppose the reason why the GBBA got a large slice was because AC needed to pay the bills on that one too. Of course it's all going to be just fine because there is always the promise of jam tomorrow. Though I notice that all that jam I was promised by AC last year (... production was forecast at a stonking £250mm) never got delivered. Moreover, the old jam used to have about 12 strawberries per pot and the new stuff seems to only have 9 or 10. AC say it's still correctly priced though so I'm sure I'll be just fine. Perhaps I should just eat more cheese now that the old TC cheese factory is under new management. If TC is the better fit for you then lend via TC - we'll do our best but we're not going to appeal to everyone, and if what we're doing doesn't appeal then we aren't the only game in town. The QAA has to grow for our plans to work, including those for origination growth. I know there's an element of the lender base that wishes we'd just stuck to the formula we had back when the site launched and only manual lending. The unfortunate truth is that the marketplace has changed immeasurably since then and had we remained static it's likely we wouldn't be in business, or at the very least we would be struggling. Origination had stalled throughout 2015 and the exec has taken a while to work out the exact formula required to bring origination back up to where it should be, and then it has taken time to execute. Given the average lifecycle of enquiry to loan is 4 - 6 months that's not entirely surprising but we all share your frustrations in that regard. The QAA has been an essential cog in that, and its growth is needed to help grow our origination. We have a plan that is being executed and has been working every step along the way. Origination levels have now been on average ten times higher over the last three months than at any time in the company's history, bar one previous exceptional month which we're only five times bigger than. There's a lag through the drawdown process but we've seen similar upticks in decisions in principle sent out, offers issued, and now we're starting to see it in offers signed. Drawdowns will follow starting in January but really kicking in around February / March time. When that comes to pass I hope you'll understand and accept the decisions and steps we've had to take in order to get there.
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kermie
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Post by kermie on Dec 12, 2015 13:41:34 GMT
A further £1426.88 in Galashiels just bought. That's more like it!
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Post by chris on Dec 12, 2015 13:41:58 GMT
Aftermarket release has been processed.
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oldgrumpy
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Post by oldgrumpy on Dec 12, 2015 13:47:41 GMT
Ditto. Thank you AC. I wish it hadn't taken all this aggravation to instigate it. If my share of the "new" available £250K is £1426.88, it really does go to show how miniscule the original tranche given to all the MLIA investors must have been. <£10K? it seems.
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ianj
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Post by ianj on Dec 12, 2015 13:57:59 GMT
We will no longer release the full loan to the market at the second of drawdown, just like many UWs drip their stock into the market. We brought forwards some more release today and will release more of this loan in the future too. The system is moving to automatic releases and we over-rode that today to bring more to market faster given the low supply recently. Sorry for any confusion this caused and as we deliver more loans now this problem should dissipate, I sincerely hope so. The advent of GEIA, GBBA and QAA has already seriously muddied the water. Now, just as draw-down date accuracy is being tighten-up, more variables are to be introduced. In an ideal world, MLIA lenders would always have advance knowledge how much is going to be made available and when. Can you advise whether lenders will ever be given clear data regarding an expected spilt between accounts? What advance information will be made available with regard to automatic releases?
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Post by chris on Dec 12, 2015 13:58:52 GMT
Ditto. Thank you AC. I wish it hadn't taken all this aggravation to instigate it. If my share of the "new" available £250K is £1426.88, it really does go to show how miniscule the original tranche given to all the MLIA investors must have been. <£10K? it seems. Would have been a lot higher than that if you include the amount the GBBA bought plus consider it was around 600 people investing in this loan via the MLIA. But obviously not enough. I'll make sure communication on this is much better in future if there is to be limited availability.
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Post by pepperpot on Dec 12, 2015 15:23:29 GMT
£40 to £1,750 ish? If you were a politician this would probably be called a U-turn. We will no longer release the full loan to the market at the second of drawdown, just like many UWs drip their stock into the market. We brought forwards some more release today and will release more of this loan in the future too. The system is moving to automatic releases and we over-rode that today to bring more to market faster given the low supply recently. Sorry for any confusion this caused and as we deliver more loans now this problem should dissipate, I sincerely hope so. I understand this part of the QAA's investment strategy, invest heavy early on as the chances of a loan going pear shaped in the first few days are negligible. It would also be advantageous to MLIA investors to know on what date a loan will be available. It seems to me these two are aligned. If QAA always took the first X days of investing in each loan before releasing to the moaning mob manual investors, QAA is fed with a supply of low risk short term holdings to help generate it's coupon and we get to know at drawdown when and how much of the loans will be released for general consumption. Obviously it will be variable per loan dependent on the current flow rate, but could a schedule of planned releases into which account be published, given you say 'automatic releases' is the new direction? A large lettered caveat of 'this schedule can change without notice' might be advisable. There's also the advantage that this would increase the diligence and finance organising time for MLIA users. Thoughts?
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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 Dec 12, 2015 17:01:45 GMT
Ditto. Thank you AC. I wish it hadn't taken all this aggravation to instigate it. If my share of the "new" available £250K is £1426.88, it really does go to show how miniscule the original tranche given to all the MLIA investors must have been. <£10K? it seems. Would have been a lot higher than that if you include the amount the GBBA bought plus consider it was around 600 people investing in this loan via the MLIA. But obviously not enough. I'll make sure communication on this is much better in future if there is to be limited availability. #208 has funds called. I note that there is a Q on how this loan will be distributed. chris can we make sure this is communicated clearly & on the Activity tab, not just Q&A?
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Post by chris on Dec 12, 2015 17:52:51 GMT
Would have been a lot higher than that if you include the amount the GBBA bought plus consider it was around 600 people investing in this loan via the MLIA. But obviously not enough. I'll make sure communication on this is much better in future if there is to be limited availability. #208 has funds called. I note that there is a Q on how this loan will be distributed. chris can we make sure this is communicated clearly & on the Activity tab, not just Q&A? One to raise with the lender team via the official channels. If things keep coming via me they sometimes miss the bigger picture of how in demand a particular feature or approach is. Edit: But obviously I'll do my part as well as I want to get this right. To that end I've already kicked off an internal discussion.
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trevor
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Post by trevor on Dec 12, 2015 20:24:29 GMT
Cheers Chris and your colleagues, you listened to the negative feed back and reacted positively. I'll keep my money with you.
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mikes1531
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Post by mikes1531 on Dec 12, 2015 21:32:34 GMT
So what we're learning is that the reason the QAA needed to take a big slice of this loan was to pay the bill on the QAA. Of course if AC hadn't increased the QAA from £1mm to £3.5mm then the bill wouldn't have been so large. And they also tell us that the QAA is about to get bigger. Fantastic, lets all cheer! I suppose the reason why the GBBA got a large slice was because AC needed to pay the bills on that one too. AIUI, the GBBA situation is different from the QAA situation. With the QAA, AC are committed to paying 3.75% on everything in the account -- i.e. everything except that which is queued waiting to get into it. Part of the QAA funds are left as idle cash to ensure liquidity, and part are invested in loan parts paying interest to provide the funds for AC to pay QAA interest and build up the QAA PF. If the parts are earning an average of, say, 9% then as long at no more than about half of the QAA is idle the interest being earned will be sufficient. As the maximum size of the QAA is increased, AC need to make sure more of the QAA funds are placed in loan parts. Since the QAA size was increased very recently AC probably needed to put a chunk of the parts of the next loan to be released (#199) into it, and that why they decided to bias the distribution of #199 parts. With the GBBA, AC pay 7% interest only on loan parts that are invested in GBBA loans. So the issue there is that if people put more money into the GBBA than there are parts available to acquire, then people see that some of their GBBA funds are 'Awaiting investment'. If there's sufficient QAA capacity and GBBA investors have opted to sweep their 'idle' GBBA funds into it, then they'll earn 3.75% on uninvested GBBA amounts. That's better than nothing, but their resulting average GBBA return will be less than 7%. If some of the uninvested funds are queued for the QAA, or if an investor hasn't opted for the QAA sweep, then those idle funds will be earning nothing, and those investors' average GBBA returns will fall even further below 7%. Sub-7% GBBA returns will not make investors happy, so AC need to try to keep uninvested GBBA funds to a minimum, and that isn't easy if the flow of GBBA-eligible loans is low. Which is the current situation, and that's why AC would want to bias the allocations of #199 parts towards the GBBA. IMHO, everything would have been fine if AC hadn't significantly overdone the bias.
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