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Post by ruralres66 on Aug 2, 2016 19:20:25 GMT
"Retirement of the 3 Year market
After years of good service, today we are announcing the retirement of the 3 Year market from 5th October 2016.
When RateSetter launched in 2010, investors could choose between the Rolling and the 3 Year markets. Over time we added the 1 Year and 5 Year markets and made other adjustments so that our range now caters to three distinct investor needs: Rolling investment with no early withdrawal fees 1 Year investment (with early withdrawal fees) Longer term investment (with early withdrawal fees) Today, we recognise that the 3 Year market has been superseded by the 5 Year market as the choice for investors seeking a longer term investment. Click below to read more, including the transitional arrangements."
All comments welcome!
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jonah
Member of DD Central
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Post by jonah on Aug 2, 2016 20:07:49 GMT
www.ratesetter.com/blog/article/3-year-product-changesBased on recent rates offered its no real surprise. I would gaked to have a few k in 3 year this tax year but not at the numbers offered. Still it makes sense if people don't want to borrow for 3 years that rates wouldn't be great. A positive in a way... RS can focus on finding some more prime 5 year borrowers and get closer to 6.5%
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iren
Member of DD Central
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Post by iren on Aug 2, 2016 20:38:31 GMT
Will RateSetter not be offering 3 year loans to borrowers? Or are they planning to use more shorter term money, from the Rolling and 1 Year markets, to match to 3 Year loans, at the lower rates that can be offered to investors in these markets?
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Post by ruralres66 on Aug 2, 2016 21:12:52 GMT
I am not sure of the details as RS offered this info within my monthly statement. As I currently have large 5 figure sum in 3 year at an average of 5.2% - mostly contracted 2015, I am expecting early repayments/ defaults to ensure. Having recently read the FT articles of doom and gloom re Provisional Fund capacity, I was minded to Sellout anyway. Having now discovered this forum and properly digested it's content over the last week, I think I will hang on for the moment. The Forum has provided me with sufficient understanding to make informed decisions I feel. Thanks a bunch to all who have shared their understanding. I had been really struggling getting any proper handle on RS as the website does not Convey the detail I required in a rounded way. I did attend the RS presentation in Parliament New City Agenda-so at least I could eyeball the CEO. I even asked a question which he failed to answer! The presentation was strong on history but thin on where P2P is likely to be going. I was not very impressed.......😣........ PS I saw the 2007 2008 crisis coming and planned accordingly. I a lay person, could never understand why others didn't. We seem to be drifting in that direction once again .
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Post by westonkevRS on Aug 3, 2016 7:34:50 GMT
I am not sure of the details as RS offered this info within my monthly statement. As I currently have large 5 figure sum in 3 year at an average of 5.2% - mostly contracted 2015, I am expecting early repayments/ defaults to ensure. Having recently read the FT articles of doom and gloom re Provisional Fund capacity, I was minded to Sellout anyway. Having now discovered this forum and properly digested it's content over the last week, I think I will hang on for the moment. The Forum has provided me with sufficient understanding to make informed decisions I feel. Thanks a bunch to all who have shared their understanding. I had been really struggling getting any proper handle on RS as the website does not Convey the detail I required in a rounded way. I did attend the RS presentation in Parliament New City Agenda-so at least I could eyeball the CEO. I even asked a question which he failed to answer! The presentation was strong on history but thin on where P2P is likely to be going. I was not very impressed.......😣........ PS I saw the 2007 2008 crisis coming and planned accordingly. I a lay person, could never understand why others didn't. We seem to be drifting in that direction once again . Hi ruralres66As an ever open offer to lenders with a reasonable about of cash with RateSetter and not working for the opposition, I offer an open ended invitation to visit the office anytime. Just contact me directly and I'll happily give the tour and answer any questions in person. Rhydian is very open, honest and transparent. But he does sometimes have that unique skill of not always quite answering the question directly, I spot a future PM..... Kevin.
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Post by westonkevRS on Aug 3, 2016 7:38:27 GMT
Will RateSetter not be offering 3 year loans to borrowers? Or are they planning to use more shorter term money, from the Rolling and 1 Year markets, to match to 3 Year loans, at the lower rates that can be offered to investors in these markets? Yes, and they will be funded from the shorter term markets. That's the only way it can be done competitively. But it's quite a small market of borrowers, especially after we stopped using this market for some commercial lending. Kevin
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Post by propman on Aug 3, 2016 7:46:52 GMT
Will RateSetter not be offering 3 year loans to borrowers? Or are they planning to use more shorter term money, from the Rolling and 1 Year markets, to match to 3 Year loans, at the lower rates that can be offered to investors in these markets? Yes, and they will be funded from the shorter term markets. That's the only way it can be done competitively. But it's quite a small market of borrowers, especially after we stopped using this market for some commercial lending. Kevin Kev, do you know what will happen to any offers that are not used prior to 5/10? Will these also be released and the proceeds transferred to holding account?
- PM
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Post by GSV3MIaC on Aug 3, 2016 8:40:33 GMT
I'm sad about loss of the 3 year market, it used to be my favourite .. but the writing has been on the wall ever since said commercial borrower stopped soaking up oodles of money, and rates plummeted to sub-1-year levels in some cases. Not sure how much I want in 5 year at <6% though.
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Post by propman on Aug 3, 2016 11:39:10 GMT
Also, if there will be significant 3 year loans funded from 1 year and monthly markets, this will increase the liquidity risk on the 1 year market. I know that Kev has said some 5 year loans have been funded from these markets, but the proportion (we are told) has today been small beyond 2 year loans. For a 1 year loan, there is a big difference between the prospect of repayment in 12 rather than 24 instalments in this scenario (without a resolution event). Especially when the interest rate is fixed at the original 1 year rate.
Is there a case for a 2 year bond?
- PM
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alender
Member of DD Central
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Post by alender on Aug 3, 2016 12:33:42 GMT
I agree with Propman, this is not a good move as it will increase short term money used for longer term loans thereby increasing the risk of a lock in if/when there run on RS. As I have said before this may not be anything RS does but a general full in confidence in P2P cause by events outside P2P or problems with some P2P platforms. With the current low interest rates and increase chance of a lock in the Rolling and 1 year markets these look less worthwhile with also the unknown effect of Britexit to take into account.
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teddy
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Post by teddy on Aug 3, 2016 14:32:24 GMT
I've been on permanent drawdown for the last month. The 5 yr rates simply aren't good enough to justify the risk, especially with the reduction in the PF and all the slight of hand that's gone on with it recently.
The 30 day access 4.25% account at AC, which is now where all my RS withdrawals are going, is now looking very good value as I expect the RS 5 year rate to now sink below 5% due to all the 3 yr money going on the market. There will just be too much money swimming around for anything less.
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jlend
Member of DD Central
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Post by jlend on Aug 3, 2016 19:25:25 GMT
Will RateSetter not be offering 3 year loans to borrowers? Or are they planning to use more shorter term money, from the Rolling and 1 Year markets, to match to 3 Year loans, at the lower rates that can be offered to investors in these markets? This is the reply on the website blog Money on the 5 Year market will continue to fund amortising loans with terms of 4 and 5 years. Money on the 1 Year market funds 1 year loans, and the rest (including some 4 and 5 Year loans) is funded by money on the Rolling market.
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Post by Deleted on Aug 4, 2016 9:30:20 GMT
In light of these changes, it would be good if previous lenders in the 3 year market were also offered the chance to retire their loans early without the significant early withdrawal fee's.
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starfished
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Post by starfished on Aug 4, 2016 18:59:28 GMT
In light of these changes, it would be good if previous lenders in the 3 year market were also offered the chance to retire their loans early without the significant early withdrawal fee's. I might be missing something but confused why they should. Those people are still in the same position? They don't have to sell but can do in the secondary market?
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Post by westonkevRS on Aug 5, 2016 4:34:42 GMT
Kev, do you know what will happen to any offers that are not used prior to 5/10? Will these also be released and the proceeds transferred to holding account?
- PM As I understand, any unmatched funds on the 3-yr market will automatically be returned into the holding account. Kevin.
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