Plenty for sale in SM ?

No. The QAA is being used to underwrite entire loans - therefore after drawdown it tries to rebalance or re diversify (so if it underwrote a 500k loan and retail took 100k on drawdown it will try and sell the excess down to its desired level). While this happens it exercises its market sell priority and nobody else can sell - as is happening on a few loans at the moment.

I believe one name has bought around £1m of it after redemption of another loan.  Good for the market.

I was having a discussion with them about something else a couple of weeks ago and voiced my concerns about the amount of this loan that was available and it was mentioned that this could happen. 

Good point bg, and I see this QAA sell-down is different to traditional underwriters selling down their holdings in that they would not have priority over MLIA investors hence the gripe from some.

I still struggle with the issue that it is mainly only the newer loans that have any quanitity of units on the market so if MLIA investors are desperate to sell units in loans they only purchased recently it begs the question why did they buy so much in the first place. I suspect that past market dynamics have lead some lenders with money to invest right now into buying much more than they ever intended to hold long-term, safe (they thought) in the knowledge that they could sell some on when new and potentially more attractive loans came along or simply to diversify further. I see this as a valid issue for these folks.

My strategy here is to use the QAA for my soon to be invested cash and accept the lower rate to make sure I don't end up investing i. more of a loan than I am comfortable longer-term just to get a return (I also use the GBBA for other money where my liquidity requirement is lower but still relevant). With my 5 figure investment in AC this does not cost me too much and allows me to progressively build a well diversified MLIA portfolio but I accept that for the bigger players keen to maximise their return now this strategy could end up costing them a lot. It just goes to show what a truely difficult job chris andrewholgate and the AC team have trying to develop a platform that is all things to all investors!

Underwriters have always had some measure of sale priority.  They used to have statistical priority as sales were apportioned using random weighting, since September 2015 there is an explicit 85/15 split between the underwriters and MLIA where both are looking to sell, well mathematically it's a little more complex than that but it's in that ballpark depending on the number of MLIA lenders trying to sell and the amount they're trying to sell.  This helps the underwriters sell down at a fast enough rate whilst still allowing MLIA investors some measure of liquidity to offload smaller amounts where needed.

QAA has had 100% sale priority since launch but it's become apparent it's affecting the market more than we'd like so I'm in the middle of coding a new solution that will let the QAA sell at reduced priority if it chooses to do so.  So where there is immediate demand for liquidity it can still take absolute priority but in normal circumstances it will have the option to either join the underwriter pool or the MLIA pool in terms of priority.  The QAA is well diversified now so we're happy for it to slowly sell down here and there across the book with no need for priority in those sales.

If MLIA lenders need more emergency liquidity than this will let them have then they have the additional option not available to other investment accounts to sell at a discount.

Yes all accounts do so.

I've always been mystified about why some people will invest in such low-rate loans.  Some of the old BtL loans were at 50% LTV, so perhaps people really value the improved security compared to 70% LTV loans since there is no PF for those loans.

But I'm still mystified by why an investor might prefer one of the current 7% loans -- where they're exposed to default risk -- to a GBBA investment that would produce the same 7% return and have the further benefits of diversified holdings and a PF.

Anybody have any thoughts?