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Post by zzr600 on Jun 8, 2016 10:47:48 GMT
Currently, £1.7M loan in default out of a loanbook of 74 loans worth £105M. So 1.3% of loans or 1.6% by value. Not bad I guess as this is only their second default, the (smaller) one last year resulting in no loss to investors.
There has been some negative comments about PBL020, with some posters suggesting investors will lose 100% of the investment. This can't be based on the SS track record so far, which I think is quite good. Anyone care to comment?
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SteveT
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Post by SteveT on Jun 8, 2016 10:51:27 GMT
Oh God, really? ANOTHER thread?
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dufus
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Post by dufus on Jun 8, 2016 16:37:45 GMT
I wrote the following to Saving Stream as I have previously lent money directly to developers and the standard practice is to add a few extra percentage points of interest to defaulted loans until they are eventually paid back. Assetz Capital and Funding Knight are 2 examples of companies that charge penalty interest and pass it on to the investors. However, Saving Stream state that they keep it for themselves. I don't think this is fair. Below is my email thread with them. My words are in black italics and their replies are in red.
PBL020 - A****** G***** C******, M******
Hello,
Please can you tell me if we, as investors, receive penalty interest added to the outstanding amount owed to us by this borrower on A****** G***** C*****- PBL020.
Thanks.
No you have interest still accruing at 12%pa on this defaulted loan.
Customer Services Team
Saving Stream
Do you charge the borrower penalty interest and keep it for the company?
Yes we do, but we also have no guarantee that we will receive this default interest, as in the event of a shortfall, Lendy have the provision fund to cover any shortfall to ensure investors do not lose their funds.
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sam i am
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Post by sam i am on Jun 8, 2016 17:15:20 GMT
It seems fair to me. SS are taking increased risk (since they may have to pay out from the PF) so receive a higher interest rate. The risk to lenders is less because the PF is there to mitigate losses, so the standard interest rate applies.
I think a lot of people will be happy just to get their capital back. If they get accrued interest as well, they will be delighted. Penalty interest as well? I doubt many would expect this.
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oldgrumpy
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Post by oldgrumpy on Jun 8, 2016 17:18:32 GMT
Oh! Have I had a post moderated "out"?
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Post by GSV3MIaC on Jun 8, 2016 17:20:12 GMT
If you did it was because a mod (me?) hit the wrong button (if so 'oops, sorry), but you really shouldn't have quoted what dufus really shouldn't have written... i.e. the name of the borrower. |
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oldgrumpy
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Post by oldgrumpy on Jun 8, 2016 17:22:36 GMT
OK, didn't even notice he'd done that - I was taking the **** out of something else .... but my post has popped up on another thread now  I wondered how my "last edit" was by you  I'm not sure it's me who needs a lie down or Dave!  |
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Post by Financial Thing on Jun 8, 2016 17:27:31 GMT
It seems fair to me. SS are taking increased risk (since they may have to pay out from the PF) so receive a higher interest rate. The risk to lenders is less because the PF is there to mitigate losses, so the standard interest rate applies. I think a lot of people will be happy just to get their capital back. If they get accrued interest as well, they will be delighted. Penalty interest as well? I doubt many would expect this. Fair point if the PF wasn't discretionary. No guarantee the Directors will pay out of the PF.
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Post by GSV3MIaC on Jun 8, 2016 17:31:58 GMT
OK, didn't even notice he'd done that - I was taking the **** out of something else .... but my post has popped up on another thread now I wondered how my "last edit" was by you I'm not sure it's me who needs a lie down or Dave! I hit the right button then, but it was in another place. 8>. Yes, moderators can edit any post. This is sometimes annoying when I meant to go for 'quote' and get 'edit' instead. So far I have (afaik) noticed in time and backed out the changes.
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Post by pepperpot on Jun 8, 2016 18:09:31 GMT
OK, didn't even notice he'd done that - I was taking the **** out of something else .... but my post has popped up on another thread now I wondered how my "last edit" was by you I'm not sure it's me who needs a lie down or Dave! I hit the right button then, but it was in another place. 8>. Yes, moderators can edit any post. This is sometimes annoying when I meant to go for 'quote' and get 'edit' instead. So far I have (afaik) noticed in time and backed out the changes. Does the big red button have a protective cover? Just in case... mrclondon, keep an eye on this one please. Loose cannon.
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sam i am
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Post by sam i am on Jun 8, 2016 18:36:01 GMT
It seems fair to me. SS are taking increased risk (since they may have to pay out from the PF) so receive a higher interest rate. The risk to lenders is less because the PF is there to mitigate losses, so the standard interest rate applies. I think a lot of people will be happy just to get their capital back. If they get accrued interest as well, they will be delighted. Penalty interest as well? I doubt many would expect this. Fair point if the PF wasn't discretionary. No guarantee the Directors will pay out of the PF. True, there's no guarantee but I think it is widely assumed that the word 'discretionary' is for technical reasons and as a backstop but in practice the PF would be used. If it comes to the first call on the PF and discretion is used to avoid reimbursement then all credibility in the PF will immediately be lost (and a fair bit of SS overall credibility).
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Post by dualinvestor on Jun 8, 2016 21:15:03 GMT
Fair point if the PF wasn't discretionary. No guarantee the Directors will pay out of the PF. True, there's no guarantee but I think it is widely assumed that the word 'discretionary' is for technical reasons and as a backstop but in practice the PF would be used. If it comes to the first call on the PF and discretion is used to avoid reimbursement then all credibility in the PF will immediately be lost (and a fair bit of SS overall credibility). It may be widely assumed that the PF would be used but not necessarily correct. In fact it would entirely depend on the size of the default and potential other claims on the PF, whether it is dicretionary or not if it cannot pay it won't.
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Post by earthbound on Jun 8, 2016 21:23:18 GMT
True, there's no guarantee but I think it is widely assumed that the word 'discretionary' is for technical reasons and as a backstop but in practice the PF would be used. If it comes to the first call on the PF and discretion is used to avoid reimbursement then all credibility in the PF will immediately be lost (and a fair bit of SS overall credibility). It may be widely assumed that the PF would be used but not necessarily correct. In fact it would entirely depend on the size of the default and potential other claims on the PF, whether it is dicretionary or not if it cannot pay it won't. This PF subject is now the most interesting thing with regards to this default, looking over recent previous post's, it seems to be the general acceptance that the PF will pay the capital loss and 'maybe' the interest, with the latest update from SS seeming to lean toward that as well, the results could be very interesting if the opposite actually occurs.
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Post by harvey on Jun 8, 2016 21:29:03 GMT
If you take a pessimistic view and assume there are 1 or 2 other quite substantial defaults within the next year before the garden centre asset has been sold then I think it would be reckless for the provision fund to pay out to the extent of preventing capital losses on the first loan. What you don't want is different investors in different loans all potentially suffering some sort of capital loss and one loan being treated more favourably than another in terms of the provision fund because it came first in the default timetable. If you milk it to bail out people in one loan to the extent that you can't help people in others so much then you might cause investors to riot.
I think people have to lower their expectations about the impact and use of the provision fund and accept that by investing they are accepting a level of risk and they can't expect to be fully protected from that risk if something goes wrong.
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Post by dualinvestor on Jun 8, 2016 21:30:11 GMT
It may be widely assumed that the PF would be used but not necessarily correct. In fact it would entirely depend on the size of the default and potential other claims on the PF, whether it is dicretionary or not if it cannot pay it won't. This PF subject is now the most interesting thing with regards to this default, looking over recent previous post's, it seems to be the general acceptance that the PF will pay the capital loss and 'maybe' the interest, with the latest update from SS seeming to lean toward that as well, the results could be very interesting if the opposite actually occurs. Whilst I understand the cause for optimism I do not read too much into the latest statement. Of course interest continues to accrue on PBL20 but [may only] be paid if the security pays everything else ranked above it is settled. As Christine Keeler nearly said about Mr Profumo "they would say that wouldn't they?"
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I wondered how my "last edit" was by you 
