DFL012 H********* Quay, Liverpool DEFAULT (Partial Recovery

pence . I have no idea why you think we're institutional. We never had more than £2mm on the platform between over 10+ individuals. Chump change in insto terms. No, we're just private investors that collaborate to reduce the inefficiency of P2P investment. Platforms refuse to provide even the most basic automated investment tools so we automate it ourselves. We can't waste time fiddling around with small loans to make £15k in interest; we have day jobs.

SS was a nonsense platform in 2015/16. Essentially, you had large, high risk property loans (in some cases very smelly) that should have been highly illiquid. As interest on the bridges was taken upfront, the risk of default prior to redemption was suppressed. However, due to ideas like INPL (buying a loan without having to pay for it) and a par-only SM (so the price of the loan couldn't fall over the lifetime to reflect the jump-to-default risk at redemption), it was temporarily turned into a pure liquidity play i.e. people became convinced it was effectviely a 12% instant access account (a collective delusion really). So rather than do labourious DD on each loan, it became obvious to many, including ourselves, that the sensible trade was to simply buy long-dated loans a par, strip off most of the interest, and then sell them at par say 90 days before redemption. Repeat, rinse. To make that more efficient we developed an algo to risk manage the process. It was then a case of letting the algo buy the best loans against selling lower quality loans, whilst maintaining a target portfolio duration. Rebalancing between accounts was done during the early morning hours. ReCaptcha can be to some degree circumvented and we didn't need to win every trade, even a few percent success rate was enough to maintain the book. If liquidity dropped, it would auto sell and buy back when liquidity improved.

We exited simply because that investment strategy was not sustainable once other investors started to realize that NPLs were building and SS dropped INPL. As a buy-and-hold type proposition, SS wasn't hugely attractive. They were only giving investors around 41% participation in the all-in-borrowers rate (borrowers were paying 31% IRR vs. 13% to lenders). By comparison, our syndicate's direct lending (via a private bank) achieves something closer to 80% participation (no platform, introducers, underwriters). The pro's of direct lending are rate and loan quality. The con's zero liquidity and limited diversification. P2P is the mirror image: low rates, low quality loans, some liquidity and large diversification.

Edit: as an aside based on qualitative DD, I would have said DFL012 was one of their more decent loans. Just shows that good loans can turn out bad and smelly loans can turn out good.

Basically, yes

Realistically this one is going to take months if not years to resolve.  Each position taken by Lendy as they creep towards resolution will have to be double checked on the legal side.   Potential buyers will come and go as they usually do whilst the swings in the macro economic climate will also influence matters.  Auction is a relatively straightforward disposal route but is unlikely to give the best return so is probably a last resort.   So another 2 weeks in this mess is a blink of the eye.   I do not anticipate anything other than a boiler plate kick the can down the road statements for quite a while.   What is so irksome is how so soon the positive spin that had been put on the development became rubbish.

You're absolutely right. This is much very sought after and well advanced project. Heck, even I fancied buying an apartment.  As with 04, the borrowers will be more than happy for lenders to take a stupid offer leaving the developers with a massive profit.

No skin off Lendy's nose either, only we lose.

Don't accept those offers or more fool you folks. I understand the wanting to see the back of Lendy, but it is nothing short of foolish to go down this road of accepting silly offers.

Wrong loan? (At least I hope the offer isn't £11m for this one)

As financial agent only, I doubt it.