j
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Penguins are very misunderstood!
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Post by j on Apr 27, 2014 16:37:25 GMT
I'm wondering what going to happen to the second tranche. Will the owner feel slighted and go elsewhere? (no one answer that, it is an rhetoric question) For the second tranche shouldn't it be at a better interest rate as we're concentrating more risk? Well spotted Ton ⓉⓞⓃ. I'll still be surprised if it made that much difference to the final bidding though. You do have to try. If you look at previous loans for similar borrowers, the rate actually goes down on repeat business as they build borrowing history through AC & I suppose become a known & more trusted quantity on the platform. Examples include boiler man who started at 18% & the 2nd/3rd tranches were at 10%. The London law firm was also @ 18% & went down to 15% recently (they're the ones I remember anyway). Leaves you wondering what the second tranche will be at for the bags auction? 8%, 7%? I suspect it will be heavily underwritten anyway.
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Post by batchoy on Apr 27, 2014 16:42:28 GMT
A new document has been uploaded highlighting various customers/ambassadors. Along with published articles and campaign material. All in, "Public Relations Detail" Call me a cynic but it smacks a little of desperation.
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j
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Penguins are very misunderstood!
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Post by j on Apr 27, 2014 16:50:49 GMT
A new document has been uploaded highlighting various customers/ambassadors. Along with published articles and campaign material. All in, "Public Relations Detail" Call me a cynic but it smacks a little of desperation. Maybe desperation on AC's part in the sense that they would like to reduce the U/W volume on it. It looks like the borrower have got a real good deal on this one with such a low rate & considering the apprehension shown by many of the normal smaller lenders
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Post by Ton ⓉⓞⓃ on Apr 27, 2014 18:00:58 GMT
To my way of thinking this loan is already trading on that good name under the PG. Another loan can't really benefit from us now knowing that we can trust him, in this case we're, or largely the *underwriters, are already doing that. With the other loans that you mention j I think they are all coming from a difficult place and proving our trust in them and then benefiting from a more advantageous rate in their repeat business. I don't think the proposed 2nd tranche can or should benefit. This my prove to be a moot point of course. It would be a little odd if we're give a 2nd tranche with the first one still on the AM... (*These are commercial U/W's I've no idea what their rates are, that means they may not be just trusting in the good name.) |
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andy2001
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Post by andy2001 on Apr 27, 2014 19:34:32 GMT
I'm wondering what going to happen to the second tranche. Will the owner feel slighted and go elsewhere? (no one answer that, it is an rhetoric question) For the second tranche shouldn't it be at a better interest rate as we're concentrating more risk? You do have to try. If you look at previous loans for similar borrowers, the rate actually goes down on repeat business as they build borrowing history through AC & I suppose become a known & more trusted quantity on the platform. Examples include boiler man who started at 18% & the 2nd/3rd tranches were at 10%. The London law firm was also @ 18% & went down to 15% recently (they're the ones I remember anyway). Leaves you wondering what the second tranche will be at for the bags auction? 8%, 7%? I suspect it will be heavily underwritten anyway. Boiler 1/2 was first listed at 10% for 12 months, and it failed to fill so was changed to a 10% fee for 6 months making it 20%+ annual rate. There was some talk of making it into 6 trances instead of one, but it ended up as 2.
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Post by mrclondon on Apr 27, 2014 22:12:00 GMT
The substantial expansion in the volume of underwriting funds available to AC over the last few months, coupled with the apparent ease with which c. £490k of underwriting funds were pledged to this loan, introduces additional risk to normal lenders on anonymous loans.
Last year we saw odd loans fail to fill, and the assumption had to be that underwriting funds were not being made available for that particular loan. The larger anonymous loans state something along the lines of the full details have been reviewed by the underwriter(s) under a NDA. I had tended to assume this acted as a risk mitigation check for smaller lenders, but I fear this is no longer the case given we appear to have reached the point where sufficeint underwriters are available (note the Q&A which says several rejected the opportunity) to fill a loan that few normal lenders are prepared to touch.
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Post by Ton ⓉⓞⓃ on Apr 28, 2014 9:03:21 GMT
The substantial expansion in the volume of underwriting funds available to AC over the last few months, coupled with the apparent ease with which c. £490k of underwriting funds were pledged to this loan, introduces additional risk to normal lenders on anonymous loans.
Last year we saw odd loans fail to fill, and the assumption had to be that underwriting funds were not being made available for that particular loan. The larger anonymous loans state something along the lines of the full details have been reviewed by the underwriter(s) under a NDA. I had tended to assume this acted as a risk mitigation check for smaller lenders, but I fear this is no longer the case given we appear to have reached the point where sufficeint underwriters are available (note the Q&A which says several rejected the opportunity) to fill a loan that few normal lenders are prepared to touch.
I go along with what you say. In the case of London Retail though there is no mention of the u/wers having seen any documentation that Lenders haven't seen. I might be wrong but the exact opposite has been said. That is that u/wers have seen precisely the same info as Lenders. So in future loan proposals we need to check who has been given sight of what. If I'm wrong in my memory or understanding do please correct me, I make do mistkaes.
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bugs4me
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Post by bugs4me on Apr 28, 2014 9:43:34 GMT
The substantial expansion in the volume of underwriting funds available to AC over the last few months, coupled with the apparent ease with which c. £490k of underwriting funds were pledged to this loan, introduces additional risk to normal lenders on anonymous loans.
Last year we saw odd loans fail to fill, and the assumption had to be that underwriting funds were not being made available for that particular loan. The larger anonymous loans state something along the lines of the full details have been reviewed by the underwriter(s) under a NDA. I had tended to assume this acted as a risk mitigation check for smaller lenders, but I fear this is no longer the case given we appear to have reached the point where sufficeint underwriters are available (note the Q&A which says several rejected the opportunity) to fill a loan that few normal lenders are prepared to touch.
Not sure and AC seem rather vague in the Q&A about this. In one answer they state - 'commercial terms to help fill these loans in a reasonable timeframe' which may or may not imply that the rates to U/W's are more advantageous. In another answer - 'In respect of this loan underwriters have seen the same information that normal lenders receive'. If though AC are in a position to fill all loans in excess of from memory 275k with underwriters then that will reduce idle money waiting drawdown. The loan units can then simply be snapped up on the AM. So there are benefits and possibly negatives. Interested though in the 'commercial terms' as this IMO implies a more advantageous or am I just being cynical?
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mikes1531
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Post by mikes1531 on Apr 28, 2014 11:16:01 GMT
Not sure and AC seem rather vague in the Q&A about this. In one answer they state - 'commercial terms to help fill these loans in a reasonable timeframe' which may or may not imply that the rates to U/W's are more advantageous. In another answer - 'In respect of this loan underwriters have seen the same information that normal lenders receive'. So there are benefits and possibly negatives. Interested though in the 'commercial terms' as this IMO implies a more advantageous or am I just being cynical? I don't see the two AC answers as being the least bit contradictory. One refers to possible financial arrangements and the other to available information. I expect that underwriters have to be paid something to do what they do -- it's a business for them. And I expect it's a somewhat competitive business, so I don't expect AC or the U/Ws to want the commercial terms to be public knowledge. I believe that AC have said that any lender with sufficient funds and who wishes to be an underwriter should contact them and more info would be supplied. I presume that would include an indication of the commercial terms and be covered by a non-disclosure agreement. I can't remember if AC have indicated what the minimum investment might be, but I'd guess we're talking about at least six-figure sum. If I were considering becoming an underwriter, my concerns would include how much control I had over how much of my funds went into any particular loan. AC's suggestion that some potential U/Ws were offered Auction 87 and declined suggests that the U/Ws do have control. Another concern would be whether U/W's income would be treated differently for tax purposes than ordinary lenders' income, such as being considered from business/employment rather than being investment/unearned income. I'm not familiar enough with income tax to know whether or not that would be an important difference.
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Post by valerieb on Apr 28, 2014 16:08:25 GMT
What put me off this particular offering was the final sentence of the brief summary on the list of loans page. "Although no tangible security, we will be fully guaranteed by Group Chairman who we believe has sufficient demonstrable assets to substantiate this if required." If AC only had belief rather than rock solid knowledge, then I certainly wasn't going to risk even £20 finding out whether their faith was well-founded. I didn't read any further.
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Post by yorkshireman on Apr 28, 2014 16:58:40 GMT
What put me off this particular offering was the final sentence of the brief summary on the list of loans page. "Although no tangible security, we will be fully guaranteed by Group Chairman who we believe has sufficient demonstrable assets to substantiate this if required." If AC only had belief rather than rock solid knowledge, then I certainly wasn't going to risk even £20 finding out whether their faith was well-founded. I didn't read any further. My thoughts exactly and of most lenders I bet.
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bugs4me
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Post by bugs4me on Apr 28, 2014 17:13:08 GMT
Not sure and AC seem rather vague in the Q&A about this. In one answer they state - 'commercial terms to help fill these loans in a reasonable timeframe' which may or may not imply that the rates to U/W's are more advantageous. In another answer - 'In respect of this loan underwriters have seen the same information that normal lenders receive'. So there are benefits and possibly negatives. Interested though in the 'commercial terms' as this IMO implies a more advantageous or am I just being cynical? I don't see the two AC answers as being the least bit contradictory. One refers to possible financial arrangements and the other to available information. I expect that underwriters have to be paid something to do what they do -- it's a business for them. And I expect it's a somewhat competitive business, so I don't expect AC or the U/Ws to want the commercial terms to be public knowledge. I believe that AC have said that any lender with sufficient funds and who wishes to be an underwriter should contact them and more info would be supplied. I presume that would include an indication of the commercial terms and be covered by a non-disclosure agreement. I can't remember if AC have indicated what the minimum investment might be, but I'd guess we're talking about at least six-figure sum. If I were considering becoming an underwriter, my concerns would include how much control I had over how much of my funds went into any particular loan. AC's suggestion that some potential U/Ws were offered Auction 87 and declined suggests that the U/Ws do have control. Another concern would be whether U/W's income would be treated differently for tax purposes than ordinary lenders' income, such as being considered from business/employment rather than being investment/unearned income. I'm not familiar enough with income tax to know whether or not that would be an important difference. Apologies, wasn't suggesting that AC were being contradictory with their answers. I would expect though that 'commercial terms' would be indicative of a higher rate than that being offered to normal lenders. Whether this higher rate is financed by AC themselves or the borrower I frankly have no idea. However the fact that after the loan has been fulfilled irrespective as to auction close date, there remains the facility to bid underwriters out thereby presumably reducing exposure to either AC or the borrower - just a guess though as I'm not an underwriter. Also of course, there are plenty of underwriters looking to offload their holdings. Whether this is an AC move or an individual underwriter again I have no idea. From memory I think somewhere it was mentioned by AC that if you wish to become an underwriter then you need to commit a minimum of 250k although I stand to be corrected if my memory is not correct.
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