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Post by ablrateandy on Jun 21, 2015 22:19:21 GMT
Really pleased with how things have gone over the last week or so. We've had lots of trades in decent size (into four figures on some transactions) and really hope that this helps out investors. If you haven't looked at the videos in the FAQ then please do so. There's no reason NOT to list your offers for sale as you still get paid all of your accrued interest up to the point of sale and new investors are coming on board every day and looking to pick things up.
A few things to sort out on there still (next batch of work starts this week) but it's great for us to have a lot more liquidity for new and old investors and very, very tight bid/offer spreads.
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ilmoro
Member of DD Central
'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 Jun 21, 2015 23:32:28 GMT
Really pleased with how things have gone over the last we or so. We've had lots of trades in decent size (into four figures on som transactions) and really hope that this helps out investors. If you haven't looked at the videos in the FAQ then please do so. There's no reason NOT to list your offers for sale as you still get paid all of your accrued interest up to the point of sale and new investors are coming on board every day and looking to pick things up. A few things to sort out on there still (next batch of work starts this week) but it's great for us to have a lot more liquidity for new and old investors and very, very tight bid/offer spreads. Was going to ask if you had any SM stats tomorrow but you beat me to it. Is it across all loans? As weve discussed off forums never seem to be any offers on Cessna or Bottles (12% rate) or Crates (no idea why) Dont know if its worth/ possible to add some form of stats to SM page, volume/ value trades per 24hrs to highlight liquidity to lenders as its not always clear with a quick glance anything has changed eg that £996 bid on one loan has been around since the start. I know trades are happening on bottles at a narrow range (done a few) but there's no evidence to non-participants. Anyway congrats on the excellent start. If you can get the rest of the promised new loans up fairly quickly (next week  !) it will only boost SM liquity further
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james
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Post by james on Jun 21, 2015 23:52:46 GMT
A few early suggestions:
1. Best bid/offer on loan list is nice but pretty much irrelevant to anyone who can't look at the term and percentage to instantly know the yield to maturity. Annualised yield to maturity is the key value to show for those two. I can't trivially do that mathematics, so to discover whether there are any interesting yields I have to look at the details for every loan in the market. Clumsy.
2. Naturally I want to sort by the yields in the list of loans to see whether there are any of interest. And even if I can save a sorted search it'd be nice to be able to specify min/max for the two yields to make it more instantly obvious that none/some fit my desired criteria.
3. A range filter for maturities, start date, end date with date, so people can see only those with maturities in the range that interests them, which could be short (a lot of people) or long (my usual preference). A quick fill check box for the maturity ranges with choices like:
"no more than: 1, 3, 6, 9, 12, 18, 24,36, 48, 60 months"
"no less than: 1, 3, 6, 9, 12, 18, 24,36, 48, 60 months"
that automatically fills in the date range saves some date mathematics. Click on no more than 18 and no less than 12 would be only loans with maturities between 12 and 18 months. Can do these in pulldown list instead of check boxes, first pulldown choice could be pick date, with the periods following.
4. UK/international borrower check box. Some people just won't want non-UK opportunities, however attractive they are, because they will want things to be purely UK jurisdiction, at least for the lender. An additional "Strict UK only" version where no part of the deal can be non-UK, the recent shipping containers one would pass the UK test but fail the strict UK one due to the manufacturer.
Bookmarkable URLs for the searches so people can have a range of them set up.
It is nice to see a "proper" bid/offer market view.
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james
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Post by james on Jun 22, 2015 0:11:00 GMT
There's no reason NOT to list your offers for sale as you still get paid all of your accrued interest up to the point of sale and new investors are coming on board every day and looking to pick things up. Well, if I could list easily to get the price set to my total return until maturity or set a target yield to maturity for buyer that sets the discount/premium it might be of interest to always do it. Setting discount/premium and using trial and error to get to the target yield would be a more clumsy way of doing this. In practice when I look to sell loans I price according to target yield for the buyer if a loan is impaired (not possible here). If selling I also look at target yield for buyer but compare that to my total return for hold/offer decision. How much more money would I get if I kept the loan I'm considering selling, with whatever discount rate I'm inclined to use to reflect my time value for money, is one of the decision variables I'd use. I haven't seen a platform that makes those sorts of thing really easy to do without external calculations or lots of trial and error. I'd probably be happy to offer most loans at say 3% buyer yield to maturity. Probably somewhat higher than that as well, of course, just not sure where...  But just how can I offer a set yield to maturity for either me or buyer in this market? Perhaps I'd have to withdraw and re-offer every day if I wanted to do it. Even tougher if I'm aiming for a particular discount to my total return from holding. Humans like round numbers so I'd probably initially look to price at a round number yield, though not necessarily whole round number. For all loans, offer me a setting to "offer at this yield to maturity for me" and do any updating required to keep it set at that level and I'd probably use it for most loans. Maybe not at realistic prices, but it'd add depth to the market, at least.
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james
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Post by james on Jun 22, 2015 0:25:17 GMT
The amount to buy/calculate choice seems not particularly friendly. Ditto for sell. If' I'm doing either I'm willing pt pay up to x yield to maturity and want to know how much depth there is at that level. Or better still a yield curve showing the yield varying as the buy/sell size increases. At the moment I'd end up getting out a calculator to work out the amount to buy/sell to avoid going beyond the target yield.
As il moro observed, there's also the issue of liquidity at various pricing points and knowing the transaction volumes at various price levels over various time periods would be nice.
This sort of thing can provide useful pricing cues to those new to a market. even better, always display £x has traded at price/yield y/z in the last 24 hours at say 0.1% price/yield steps around current mid market could be a handy indicator. I'd want yield steps but someone might want price. Tunable to show finer granularity than 0.1, since the market allows thousandths and with tight spreads that'll matter. Or maybe 0.01 for the first ten steps up/down then 0.1 for another ten by default. If no daily transactions, weekly, fortnightly, monthly fallbacks, with period coloured non-green/black to provide clear visual clue that it's not the normal duration. That'll also end up saying how long it might take to fill a buy/sell if target amount aiming for a particular yield.
Pricing clues are perhaps the thing that'll most help people to be comfortable with the market, when it comes to deviating from round numbers.
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SteveT
Member of DD Central
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Post by SteveT on Jun 22, 2015 8:08:46 GMT
I think I agree that replacing "Best Bid" and "Best Offer" in the main SM loan listing with "Best Bid AER" and "Best Offer AER" would encourage more exploration of the bids and offers beyond
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Post by ablrate on Jun 22, 2015 8:16:29 GMT
Really pleased with how things have gone over the last we or so. We've had lots of trades in decent size (into four figures on som transactions) and really hope that this helps out investors. If you haven't looked at the videos in the FAQ then please do so. There's no reason NOT to list your offers for sale as you still get paid all of your accrued interest up to the point of sale and new investors are coming on board every day and looking to pick things up. A few things to sort out on there still (next batch of work starts this week) but it's great for us to have a lot more liquidity for new and old investors and very, very tight bid/offer spreads. Was going to ask if you had any SM stats tomorrow but you beat me to it. Is it across all loans? As weve discussed off forums never seem to be any offers on Cessna or Bottles (12% rate) or Crates (no idea why) Dont know if its worth/ possible to add some form of stats to SM page, volume/ value trades per 24hrs to highlight liquidity to lenders as its not always clear with a quick glance anything has changed eg that £996 bid on one loan has been around since the start. I know trades are happening on bottles at a narrow range (done a few) but there's no evidence to non-participants. Anyway congrats on the excellent start. If you can get the rest of the promised new loans up fairly quickly (next week !) it will only boost SM liquity further Hi il moro Thanks for the feedback - a stats pages is something that we will be looking to get up shortly - we may also have it as an addition on the front page somewhere.... but it is definitely useful. Regards Ablrate
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duck
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Post by duck on Jun 22, 2015 17:14:13 GMT
I've made a few small forays into the secondary market (buying only) and have so far picked up 'extra' in 4 loans in which I wished to increase my exposure. I've either 'offered' or bought direct and with either method the process has been smooth and offers have been quickly met ...... so thumbs up from me.
I believe that an active secondary market (backed up by the already mentioned stats page) will encourage investors to invest in loans that they might not otherwise consider. Personally I like a mixture of long and short loans but some investors will not want to get involved in 6 year loans. Visibility of an active market should encourage investment in these long, large loans.
Great to see a real market, the wait was worthwhile!
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james
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Post by james on Jun 22, 2015 19:34:18 GMT
I believe that an active secondary market (backed up by the already mentioned stats page) will encourage investors to invest in loans that they might not otherwise consider. Personally I like a mixture of long and short loans but some investors will not want to get involved in 6 year loans. Visibility of an active market should encourage investment in these long, large loans. Agreed about long term loans and liquidity. Much easier to invest long term if you can see regular trading that will get an earlier exit if desired.
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Post by ablrateandy on Jun 22, 2015 21:54:01 GMT
Thanks chaps. All duly noted. Much of the beavering away behind the scenes was to put the relevant bits and bobs in place to achieve much of that and as we grind on with development we will hopefully get more and more sophisticated whilst keeping things simple. It was worth the wait, we think. Most importantly, it's a great foundation for auto-invest which will allow very real control over people's portfolios. We don't make a secret of the fact that for our aircraft borrower, and indeed much of the upcoming capex deal flow, the ideal is probably seven year amortising on average. The aim of the secondary market is to allow people to get in and out easily and it seems to be working (we did about 6k of the bottling plant over the weekend for example). Little acorns at the moment, and I know there are still two glitches, but engagement is good and will only rise as more deals come online. Right, off to finish 64 pages of legal docs and get the next deals lined up |
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blender
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Post by blender on Jun 23, 2015 16:33:46 GMT
I would like to have the opportunity to participate in the SM but my cash has been tied up in a pending aircraft for a very long time. OK, so good interest is being earned and I do not need the cash, but had not anticipated being locked in for so long past the stated closing date. When will the bids be either accepted or returned please?
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alan
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Post by alan on Jun 23, 2015 16:48:38 GMT
Hi blender, new user here.
Is it not possible to sell pending investment on a New in the secondary market?
Alan
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ilmoro
Member of DD Central
'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 Jun 23, 2015 16:52:58 GMT
I would like to have the opportunity to participate in the SM but my cash has been tied up in a pending aircraft for a very long time. OK, so good interest is being earned and I do not need the cash, but had not anticipated being locked in for so long past the stated closing date. When will the bids be either accepted or returned please? Predicted to close this week according to the comments alan unfortunately not
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blender
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Post by blender on Jun 23, 2015 17:04:23 GMT
It is not a major gripe, but I do not see what stops the cash being in limbo for whatever period Ablrate choose - other than goodwill and good sense. I am used to a limit of a week on FC, and there should be a limit here. You never know when you will need your cash and I would not be keen to have a large sum tied up indefinitely.
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james
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Post by james on Jun 23, 2015 20:01:28 GMT
Given the nature of many of the loans here I wouldn't be surprised if quite a lot of them require teams of lawyers and company chairmen to do final signoff so a but longer than FC might be expected.
Still, a long time between committing money and disbursal could be an issue and there's precedence of a sort for charging interest for delays in the way the tanker industry handles it. A standard tanker contract has three days of laytime to complete loading and unloading and demurrage will be charged to the ship owner by the charterer for delays longer than that which are the fault of the ship, perhaps if its pumps aren't working or not fully so. A borrower might be asked to agree to commence paying interest if it takes more than ten business days to complete their pre-drawdown steps from the time that Ablrate notifies them that all is ready and has provided them with all required documentation.
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But just how can I offer a set yield to maturity for either me or buyer in this market? Perhaps I'd have to withdraw and re-offer every day if I wanted to do it. Even tougher if I'm aiming for a particular discount to my total return from holding.
