metoo
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Post by metoo on Jan 26, 2016 17:11:29 GMT
We have been assured that the 10% plums will not be cherry picked. The probability of all three being chosen as whole is not that low - say about 0.3 - but that had better not happen too often. There is no declared rate of allocation to the Fund. However, until recently it was taking roughly 1 in 4 property tranches. 1/4 x 1/4 x 1/4 = 1/64 or 1.5% chance. The rate of allocation could change and random chance could deal this allocation, but it will be interesting to watch how lucky the Fund is.
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acky
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Post by acky on Jan 26, 2016 17:51:55 GMT
We have been assured that the 10% plums will not be cherry picked. The probability of all three being chosen as whole is not that low - say about 0.3 - but that had better not happen too often. There is no declared rate of allocation to the Fund. However, until recently it was taking roughly 1 in 4 property tranches. 1/4 x 1/4 x 1/4 = 1/64 or 1.5% chance. The rate of allocation could change and random chance could deal this allocation, but it will be interesting to watch how lucky the Fund is. The notion that the allocation is random seems about as likely as Father Christmas meeting the Fairy Carnassial (that's the Tooth Fairy to save you reaching for the dictionary!). Or am I being unFairly Cynical?
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blender
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Post by blender on Jan 26, 2016 19:58:30 GMT
I remember reading The Hogfather and they are both important characters, though I do not think they meet - probably because we create then in separate domains and would not expect them to meet. We have to believe in Fairy Castle's random allocation for it to exist. If we do not believe and do not challenge the evidence of cherry picking, then what is the point of their maintaining the reality of the random allocation - rather than doing what suits them best for each loan?
Metoo: I was using the general allocation of all loans, which was about 70%. If the allocation of property is different (and statistically valid) then that is not as it should be.
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blender
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Post by blender on Jan 27, 2016 9:49:51 GMT
I have had a good look at the statistics of whole loan allocation and over the last 900 loan numbers in the loan book 26th Jan, starting with a property development whole loan, the overall allocation to WL has been 62% while the WL allocation to the interest-only property-related loans has been 40% (sample size 47). This does indicate that there is not just one lever which allocates all loans on a random basis and a variable proportion, but perhaps a separate lever for property. Things may have changed over the period covered, but I have not analysed that.
At a 40% proportion there would be a 6% chance of those three 10% loans being allocated as WL, or at a 60% proportion (assuming one lever and the difference being due to the small sample) about a 20% chance of those three 10% loans being allocated as WL.
Overall there is, I must admit, a case to be made for suspecting an intervention in the allocation of these three secured A loans at 10% refinancing at £1.5M the existing project at 9% with a couple of months to go. I had thought this a cherry pick - but looking at the proposal (which is detailed in the normal way as if to be examined by the usual lenders) I rather think that the birds have got at the cherries. It's only an A loan, rather than an A+, and the refinancing seems to be forced by some lack of progress in what seems a difficult project. I think that if this had been helped towards FCIT (which I am not saying is the case) then a benefit would be the reduced dialogue with potential investors. Personally I would not buy it to hold to term.
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metoo
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Post by metoo on Jan 27, 2016 12:31:08 GMT
I have had a good look at the statistics of whole loan allocation and over the last 900 loan numbers in the loan book 26th Jan, starting with a property development whole loan, the overall allocation to WL has been 62% while the WL allocation to the interest-only property-related loans has been 40% (sample size 47). There is only one (recently arrived) WL lender known to be buying property loans (and SME) whereas there are presumably several (previously existing) that buy only SME loans. Random allocation would have to cope with this. Sounds like possibly we've been spared this time! ... but looking at the proposal (which is detailed in the normal way as if to be examined by the usual lenders) ... Sorry to be dense, but where does one find access to the proposal? IR as usual, navigation via linked loans.
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blender
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Post by blender on Jan 27, 2016 14:30:05 GMT
Metoo - yes you are right about the number of purchasers, and if they used the same randomiser, with property loans being much larger, then the FCIT portfolio would contain too much property and the average rate might be lower. But they have not declared this detail.
Timmy, yes, you have to find a live T********y loan (I used the loan book) and navigate via the financials page.
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am
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Post by am on Jan 27, 2016 15:00:44 GMT
The 3rd tranche of the Tewkesbury refinance appears not to be drawndown, even though FCIF bid for it on the 22nd. Was it rushed through prematurely? (There's over 1 month remaining on most if not all of the remaining tranches of the original loan.) Has someone noticed it would break the investment rules in the FCIF prospectus?
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blender
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Post by blender on Jan 27, 2016 15:07:58 GMT
The 3rd tranche of the Tewkesbury refinance appears not to be drawndown, even though FCIF bid for it on the 22nd. Was it rushed through prematurely? (There's over 1 month remaining on most if not all of the remaining tranches of the original loan.) Has someone noticed it would break the investment rules in the FCIF prospectus? I was wondering about that. £1.5M with one borrower. Maybe we should prepare for a 10% A. I would hold some for 6 months if they added 1% cash back.
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am
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Post by am on Jan 27, 2016 15:38:22 GMT
The 3rd tranche of the Tewkesbury refinance appears not to be drawndown, even though FCIF bid for it on the 22nd. Was it rushed through prematurely? (There's over 1 month remaining on most if not all of the remaining tranches of the original loan.) Has someone noticed it would break the investment rules in the FCIF prospectus? I was wondering about that. £1.5M with one borrower. Maybe we should prepare for a 10% A. I would hold some for 6 months if they added 1% cash back. There's about £1,000,000 to come, plus £380,000 to £500,000 if they retrospectively enforce the 0.75% rule, so we should be expected some to appear within the next month of so, unless sales are completed faster than expected. Some of the proceeds from the sale of phases 1 and 2 will get diverted into phase 3, but I expect that the earlier tranches of the new loan will repay in about 6 months. But if they get it way during the late winter doldrums they won't need cashback.
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metoo
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Post by metoo on Jan 27, 2016 15:43:46 GMT
The 3rd tranche of the Tewkesbury refinance appears not to be drawndown, even though FCIF bid for it on the 22nd. How do you tell whether these tranches are drawn down, except that they are in the loan book? Edit: I can now see 19404 has £0 outstanding on the Financial Summaries implying it has been repaid. 7248 and 7421 are repaid. 19466 is shown as a linked loan in the loan book on the existing tranches, though not appeared in its own right anywhere yet. It seems the situation is being rectified, at least in regard to any over-allocation.
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blender
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Post by blender on Jan 27, 2016 16:12:50 GMT
There are three loans in the book totalling £1.5M plus a link to the 4th, 19466, which has not been drawn down. The third, 19404, has now been reversed with the note 'This loan has been bought by mistake by the funds. This loan has been fully repaid by FC today. We will still collect the funds from the borrower once the sale is done'. Technical error or human?
So the FCIT amount is at £1M. I am not sure what the note on 19404 means, other than being cancelled, but we shall see. Loans not bought as WL are supposed to go straight to the partial board - that is what FC have said before.
Total funding requirement is given as '£2,918,340 (incl.
interest & fees)'.
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metoo
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Post by metoo on Jan 27, 2016 16:50:13 GMT
There are three loans in the book totalling £1.5M plus a link to the 4th, 19466, which has not been drawn down. The third, 19404, has now been reversed with the note ' This loan has been bought by mistake by the funds. This loan has been fully repaid by FC today. We will still collect the funds from the borrower once the sale is done'. Technical error or human? So the FCIT amount is at £1M. I am not sure what the note on 19404 means, other than being cancelled, but we shall see. Loans not bought as WL are supposed to go straight to the partial board - that is what FC have said before.'. Total funding requirement is given as '£2,918,340 (incl. interest & fees)'. Do they write cryptic crosswords in their spare time? 19404 is not a WL reject though, it was bought and repaid. It will be interesting to see when tranches appear and how many. £1.9m to go is quite a chunk. It looks like approx £1.135m was used to repay 7248 and 7421. How much of this was unused funds (contingency) I don't know. Perhaps 19380 and 19397 were enough to cover it, or any shortfall was covered from petty cash? But 19380 and 19397 include 12 months interest and fees, so the principal is substantially less than £1m. Perhaps the answer is in the cryptic clue somewhere. Or 19560.
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blender
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Post by blender on Jan 27, 2016 17:38:07 GMT
So the lender, 19404, bought the loan by mistake. I have never heard of a loan being repaid by a borrower because the lender changed their mind - it's only the borrower who can repay early. Does FCIT have special privileges if it makes a mistake which others do not? Normally if a borrower repays after a day or two then interest is payable until the end of the month, but I imagine FCIT will forego that.
Yes, 19404 is not a WL reject - well not in the normal sense because it was rejected after the lender bought it. But what about 19466, which has not been seen on the partial board and has disappeared without trace. Presumably that as well was randomly made a WL, and should have become a WL reject.
Oh what a tangled web!
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Post by GSV3MIaC on Jan 27, 2016 17:50:51 GMT
My guess is that FC have repaid their FC IT, which should not have bought the 3rd tranche .. in which case it's on FCs books, but not part of the IT. Or I might be completely wrong (in which case Fc can probably offer me a top job) 8>.
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metoo
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Post by metoo on Jan 27, 2016 18:04:18 GMT
So ... what about 19466, which has not been seen on the partial board and has disappeared without trace. Presumably that as well was randomly made a WL, and should have become a WL reject. Oh what a tangled web! What are the random odds of pulling out 4 tranches in a row from the lucky dip, all for the same borrower? If the single tranche odds are as high as 40%, that makes it 1 in 40. If the rate was the earlier 25%, that would give a 1 in 250 chance. Perhaps the random generator got stuck?
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