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Post by meledor on Jan 9, 2017 15:20:39 GMT
It could become a lot more unclear if lenders are not paid in full. As far as I am concerned as I said yesterday I think Lendy are liable as the primary debtor but I doubt they shae that opinion. Perhaps someone should go to the loan's Q&A tab and ask SS who they consider to be on the hook for this one.
What would be the point of asking such a question when SS have already made their view clear on the 'Recent Updates' tab?
It says "In the event that there is a shortfall then Lendy will pay you a proportion of the recovery proportionate to the amount invested by you in the loan (clause 5.3.1)."
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ilmoro
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Post by ilmoro on Jan 9, 2017 15:34:32 GMT
And you really think nobody has done this? Or queried the contradictions between the legal statement and previous statments on old structure? You have noticed the kind of people who inhabit these parts?  SS dont respond (probably for legal reasons) |
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mikes1531
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Post by mikes1531 on Jan 9, 2017 21:24:09 GMT
If you believe everything SS have told us, you'd be in a very confused state because at least some of it is contradictory. I couldn't agree more. One of my (many!) problems is that I can see the contradictions and don't know what to believe. My 'vote' on this poll is "100% of capital because SS liable under old T&C". And it wouldn't surprise me if that's SS's preferred result because it would keep all the investors happy and win SS lots of points. I don't really expect them to use the PF for PBL020 because if they're going to top it back up again afterwards, why incur the wrath of those who believe the PF can only be used for loans under the new Ts&Cs? The big issue is whether SS/Lendy can afford to cover the losses, and I haven't a clue whether they can or can't. It's clearly in their best interest to prolong the recovery process as long as possible in the hope that they'll be able to trade their way out of this crisis. ...because their cut of a single months interest on their ~£350m loan book would surely cover any shortfall many times over. : I think the above is being overly optimistic. The SS website says the loan loan book is only £152.5M at the moment. I don't know what their net monthly profit on that is, but I'd be surprised if it's enough to cover the likely loss on PBL020 -- which I'd guess will turn out to be between £0.5M and £1M by the time all the recovery costs are factored in -- once, much less 'many times over'.
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mason
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Post by mason on Jan 10, 2017 6:28:14 GMT
...because their cut of a single months interest on their ~£350m loan book would surely cover any shortfall many times over. : I think the above is being overly optimistic. The SS website says the loan loan book is only £152.5M at the moment. I don't know what their net monthly profit on that is, but I'd be surprised if it's enough to cover the likely loss on PBL020 -- which I'd guess will turn out to be between £0.5M and £1M by the time all the recovery costs are factored in -- once, much less 'many times over'. You're right. I was just looking at the Live Loans table, but I read off the wrong column (total value of assets instead of total loans). So, going with £150m, I believe SS stated quite a long while ago that it was charging borrowers about 1.5% per month and paying investors 1%, so SS's cut is about 0.5%. So on its whole loan book, that would equate to about £0.75m per month, and not the £1.5m I came up with on the basis of the figure above (note that I did not intend to imply that I believed SS could cover the shortfall many times over with a single months profit, even though it is the most profitable P2P platform in the Universe). I guess you are a little more pessimistic than me about the recovery (my view may have been tainted by SS's claim that it has had offers at around the total value of the loan, or about 70% of the valuation), but you could well be correct about the shortfall.
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mikes1531
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Post by mikes1531 on Jan 10, 2017 13:06:50 GMT
I guess you are a little more pessimistic than me about the recovery (my view may have been tainted by SS's claim that it has had offers at around the total value of the loan, or about 70% of the valuation), but you could well be correct about the shortfall. My feeling is that if SS had genuine offers at around the total value of the loan -- presumably they meant the £1.7M of capital rather than including any accrued interest -- the property would have been sold by now. The last thing I remember reading here was that they were looking for offers in the £1.2M to £1.5M range and I'm guessing based on that they'd accept a £1.2M offer if they had one. (Surely a business is worth more when it's still trading than it is months after it's been closed down, and especially so for a business with perishable stock.) If that's the case, they'd be starting with a £0.5M capital loss, and that would grow because of the costs of the sales agents and the receivers, not to mention the lawyers. For everyone's sake, I do hope I'm being overly pessimistic, but that's how it looks to me at the moment.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Jan 10, 2017 13:13:18 GMT
I guess you are a little more pessimistic than me about the recovery (my view may have been tainted by SS's claim that it has had offers at around the total value of the loan, or about 70% of the valuation), but you could well be correct about the shortfall. My feeling is that if SS had genuine offers at around the total value of the loan -- presumably they meant the £1.7M of capital rather than including any accrued interest -- the property would have been sold by now. The last thing I remember reading here was that they were looking for offers in the £1.2M to £1.5M range and I'm guessing based on that they'd accept a £1.2M offer if they had one. (Surely a business is worth more when it's still trading than it is months after it's been closed down, and especially so for a business with perishable stock.) If that's the case, they'd be starting with a £0.5M capital loss, and that would grow because of the costs of the sales agents and the receivers, not to mention the lawyers. For everyone's sake, I do hope I'm being overly pessimistic, but that's how it looks to me at the moment. Worth noting that the 'Administrators Progress Report' was published today, and at the time of writing it (20/12/16), the Joint Administrators note that they have accepted an offer for the garden centre and anticipate that this will complete during January 2017
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littleoldlady
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Post by littleoldlady on Jan 10, 2017 14:01:55 GMT
ISTM that the loss is going to be of the order of £1m, give or take a few £100k. The unknowns, in addition to the precise amount, are:
Who owes this, the borrower or SS?
Can the PF properly be used to compensate lenders?
If so how much will SS decide to use?
If not will SS compensate from their own funds and if so how much?
So many questions. I see no reason to revise my original estimate of 40-60%, but there is little doubt that SS have the means to fully compensate one way or another if they judge that the PR value will be worth it. Much depends on their view of all the other overdue loans and the likelihood of them also defaulting and how they feel about the precedent that they will set whatever they do. If they decide to let lenders take a hit on this one it might say something about the prospects for the others.
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moist
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Post by moist on Jan 10, 2017 14:12:40 GMT
if the PF pays out, in order to maintain the 2% level...another 1. whatever mill has to come from somewhere....
as 106 looks to have gone about 2mil short, interesting times ahead
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twoheads
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Post by twoheads on Jan 10, 2017 14:31:33 GMT
if the PF pays out, in order to maintain the 2% level...another 1. whatever mill has to come from somewhere.... as 106 looks to have gone about 2mil short, interesting times ahead The shortfall on these two alone would completely wipe out the PF.
I presume that the PF is replenished by ploughing some of SS's share of interest (guess £750k per month) into it? If this is so, then paying out from the PF will reduce SS's profit. Not paying out from the PF will cost investors and reduce confidence with the long term effect of, again, reducing SS's profit.
Replenishing the PF back to 2% would take a minimum of 4 months if ALL SS's interest was ploughed into it... which it wouldn't be.
One or two more similar defaults in that time could not possibly be stood by SS and must end up costing the investors.
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