registerme
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Post by registerme on Oct 29, 2015 14:33:14 GMT
9926 has formally gone pop. The latest comment says:-
"29 Oct 2015 In April 2015 one of the borrower’s main suppliers went into administration and £150,000 was taken off the borrower’s credit line overnight. Previously supportive paper merchants also decided to reduce the borrower’s credit line, with one supplier reducing a £180,000 credit limit down to £60,000. With the company’s credit line halved and with the business growing exponentially, supporting the growth of the company became impossible. Cash flow became tight, and investment in the borrower in previous months had left the company vulnerable. Producing less work was not an option due to asset based lending that had been undertaken, and steps were taken by the directors to place the company into creditors’ voluntary liquidation. We are contact with an advisor acting on behalf of the guarantor, and our negotiations regarding how the loan will be repaid are ongoing. We are therefore defaulting this loan in order to protect your position by crystallising the liability of the guarantor. Defaulting will also enable us to commence legal proceedings against the guarantor, should the guarantor become uncooperative. On a RAG (Red, Amber, Green) rating system, we would give this loan a Red status, as the prospect of recovery is uncertain at this point, however we are hopeful that this rating will improve once we have a better understanding of what the guarantors can afford to repay. For your reference, the original risk band for this loan was an A rating".
I only had ~£35 in it, and defaults are part and parcel of P2P lending to SMEs, but my question is how a company that was that vulnerable to reducing credit lines when it depended on them to maintain significant growth that was itself need to maintain asset backed loan payments could warrant an A rating? Down to the mysteries of the PG again?
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arbster
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Post by arbster on Oct 29, 2015 14:43:35 GMT
I note that 9926 isn't on the list of loans that have been defaulted today, although 9927 is. I wonder if that's a typo, or whether there are other "secret" defaults they don't publish on the website. The loan book will tell all tomorrow.
I'm also surprised that such a highly-leveraged company was able to secure an A-rating from FC, even before they evidently loosened their criteria in recent weeks. Makes you wonder whether they will ask more searching questions of companies with similar financial arrangements in future.
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registerme
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Post by registerme on Oct 29, 2015 14:45:25 GMT
Well to be fair to them 9926 has been RBR for a while.
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arbster
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Post by arbster on Oct 29, 2015 14:50:52 GMT
Well to be fair to them 9926 has been RBR for a while. Sure, but for people who don't hold these loans, the only place they get to see the number of defaults (on the website) is on the Help page, and if that turns out actually only to be a subset of the defaults each week then it doesn't seem terribly transparent.
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arbster
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Post by arbster on Oct 29, 2015 15:05:52 GMT
Seems it's a typo on the defaults notice - 9927 is a D-rated loan. Duh.
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adrianc
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Post by adrianc on Oct 29, 2015 15:27:32 GMT
Down to the mysteries of the PG again? Ah, that'll be the PG that's worthless because the guarantor is unemployed?
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registerme
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Post by registerme on Oct 29, 2015 15:30:06 GMT
I'm beginning to think that the only thing missing from most PGs is Tips.
Thankfully I have almost completely disinvested from all SME lending on FC. I'll probably let the property parts just run off.......
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adrianc
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Post by adrianc on Jan 21, 2017 10:26:43 GMT
Down to the mysteries of the PG again? Ah, that'll be the PG that's worthless because the guarantor is unemployed? Looks like 9926 has come to a head... Mid March 2016 saw an agreement for interim 50% monthly payments, which continued until June. August saw the first rattlings of an IVA, "likely to exceed 30p/£". By late November, the proposal was actually due to be issued. It's now been issued, voted on, and accepted. Finally... But does it exceed 30p/£? Oh, yes... But by how much? So my outstanding £18.14 will turn into a written-off £12.52 and a grand total of £5.62 received over the next five years... £1.12 to be received annually. I shall try to contain my excitement.
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Post by Deleted on Jan 21, 2017 11:02:00 GMT
I had invested in FC before I discovered this forum when I stopped investing further. Only had dipped my toe in so decided to leave my paltry sum deposited and see how it went.
Seems 26991 is in trouble, creditors meeting and loan downgraded. Supposedly A rated, 3rd payment failed
My loan exposure £19.46
Total interest so far £14.05
So potentially back in the red, now I've also got the hump with this Flipping Circus!
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bg
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Post by bg on Jan 21, 2017 13:21:44 GMT
I had invested in FC before I discovered this forum when I stopped investing further. Only had dipped my toe in so decided to leave my paltry sum deposited and see how it went. Seems 26991 is in trouble, creditors meeting and loan downgraded. Supposedly A rated, 3rd payment failed My loan exposure £19.46 Total interest so far £14.05 So potentially back in the red, now I've also got the hump with this Flipping Circus! Yes but investing a 'paltry sum' just doesn't work. You have to be diversified. If you want to invest in £20 clips then I would say minimum investment must be £2k to give you sufficient diversification to allow you to earn the average return of around 7% after fees and losses. Having just a few loan clips always leaves you at the mercy of a single default that leaves you with negative returns (and apart from that is it even worth the bother to earn just a few quid?). My losses have been 5.8% of my earnings after fees over a number of years. Seems about right. You can't judge the returns until you have run a sufficiently diversified loan book for minimum a year in my opinion. The other thing worth considering is having a loan downgraded does not constitute a loss. Plenty of them come back....in fact the recovery rate of loans that are actually defaulted (not just downgraded) is around 43% (if i remember correctly).
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Post by Deleted on Jan 21, 2017 14:41:33 GMT
I had invested in FC before I discovered this forum when I stopped investing further. Only had dipped my toe in so decided to leave my paltry sum deposited and see how it went. Seems 26991 is in trouble, creditors meeting and loan downgraded. Supposedly A rated, 3rd payment failed My loan exposure £19.46 Total interest so far £14.05 So potentially back in the red, now I've also got the hump with this Flipping Circus! Yes but investing a 'paltry sum' just doesn't work. You have to be diversified. If you want to invest in £20 clips then I would say minimum investment must be £2k to give you sufficient diversification to allow you to earn the average return of around 7% after fees and losses. Having just a few loan clips always leaves you at the mercy of a single default that leaves you with negative returns (and apart from that is it even worth the bother to earn just a few quid?). My losses have been 5.8% of my earnings after fees over a number of years. Seems about right. You can't judge the returns until you have run a sufficiently diversified loan book for minimum a year in my opinion. The other thing worth considering is having a loan downgraded does not constitute a loss. Plenty of them come back....in fact the recovery rate of loans that are actually defaulted (not just downgraded) is around 43% (if i remember correctly). Hmmmm I obviously take your point on diversification, my paltry sum was 1k which I thought was enough to leave deposited. I was also encouraged not to withdraw as my loans were before the recent rate drop so I figured they would always sell well at a later date. Ah well the highs and lows of p2p, plenty of highs elsewhere even if FC fail me!
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oldgrumpy
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Post by oldgrumpy on Jan 24, 2017 10:12:18 GMT
I've just received the Filtered Credibility weekly news letter - headed "What do you want to see more of?"
I didn't read further to search for the answer I wanted to give which is "realistic and reliable risk banding for all loans". (RRRB rather than RBR!)
Coffee!
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adrianc
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Post by adrianc on Jan 24, 2017 11:36:52 GMT
Hmmmm I obviously take your point on diversification, my paltry sum was 1k which I thought was enough to leave deposited. £1k at minimum £20 parts gives you 50 parts. If just one of them goes pop, that's 2% of your investment. 3.5 months of interest on the rest at a target 7%. Lose a second, and you've got 7 months of interest-free risk. Lose a third, and you're down 10.5 months. Three parts out of 50 going south in a year? Not impossible. Historical default rates are just under 2% - one of your 50 per year. Now, if we want to talk about Lending Crowd's default rate...
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Post by Deleted on Jan 24, 2017 11:50:27 GMT
Hmmmm I obviously take your point on diversification, my paltry sum was 1k which I thought was enough to leave deposited. £1k at minimum £20 parts gives you 50 parts. If just one of them goes pop, that's 2% of your investment. 3.5 months of interest on the rest at a target 7%. Lose a second, and you've got 7 months of interest-free risk. Lose a third, and you're down 10.5 months. Three parts out of 50 going south in a year? Not impossible. Historical default rates are just under 2% - one of your 50 per year. Now, if we want to talk about Lending Crowd's default rate... The numbers definitely suggest I should have deposited more if I was staying in, this was the original plan until this forum convinced me otherwise. Then I had two options, sell up quickly at par or slowly at premiums. As the rates had dropped on top rated loans since I bought mine I've been opting for the slow sell. It had been going ok. You pays your money you takes your chances I guess, if I come out above evens I won't be too devastated! (Currently £5 down if nothing further is recovered!)
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Post by Deleted on Jan 27, 2017 18:04:37 GMT
I had invested in FC before I discovered this forum when I stopped investing further. Only had dipped my toe in so decided to leave my paltry sum deposited and see how it went. Seems 26991 is in trouble, creditors meeting and loan downgraded. Supposedly A rated, 3rd payment failed My loan exposure £19.46 Total interest so far £14.05 So potentially back in the red, now I've also got the hump with this Flipping Circus! It gets worse, Total Interest £14.05 One loan downgraded and no payment being made subject a creditors meeting £19.46 Another loan now downgraded and CVA applied for £19.19 So exposure of £38.65 So far FC seem like a great way to lose money .... both loans rated A and made about 5 payments between them out of an expected 120 
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