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Post by kadhim on Jan 23, 2017 17:12:59 GMT
And per the FT article "Saving Stream is a “peer-to-peer” lending startup that provides “short-term bridging loans, secured against UK property” and is fully authorised by the Financial Conduct Authority.". Oh, since when? Or does 'fully' now include 'interim'? Apologies, that was an mistake on my part. Just to avoid any doubt, Saving Stream didn't make any claim to me that they were fully authorised. I've corrected the post now.
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Post by jackpease on Jan 23, 2017 17:14:28 GMT
Odd timing to launch this before a rebrand
Jack P
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ianj
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Post by ianj on Jan 23, 2017 17:15:52 GMT
Seems like our money isn't good enough for them! Perhaps they didn't want the forensic digging ( cooling_dude), the less than enthusiastic mutterings ( oldgrumpy) or the inevitable difficult questions (from too many to mention) that an open invitation might bring. Little did they realise.......  On the other hand, it might just be that they recoginse that a mere 6% won't sufficiently excite hardened 12%ers!  |
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stevio
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Mini bond
Jan 23, 2017 17:53:29 GMT
via mobile
Post by stevio on Jan 23, 2017 17:53:29 GMT
With a rebranding is this the model they are moving too? They have been cutting rates, maybe 6% with massive tie ins where they are moving too
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ganymede
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Post by ganymede on Jan 23, 2017 18:40:02 GMT
Seems like our money isn't good enough for them! Perhaps they didn't want the forensic digging ( cooling_dude ), the less than enthusiastic mutterings ( oldgrumpy ) or the inevitable difficult questions (from too many to mention) that an open invitation might bring. Little did they realise....... On the other hand, it might just be that they recoginse that a mere 6% won't sufficiently excite hardened 12%ers! I sold off some of my corporate bonds - what I call proper bonds that appear on ORB. Was getting 5-6% returns on those but could sell on ORB for a capital gain. This was to provide extra funds for P2P only makes sense to realize the capital gain and give up the 5-6% for the higher rates of return. Mini bonds if they are fixed term, and have high exit charges, or no SM. exit route I would avoid. I wouldn't be selling off Corporate Bonds to replace with mini-bonds. Bonds on ORB can also be held in existing S&S ISA and SIPP's. No waiting for an IF ISA, no being tried to a single providers bond offering. What we wanted wasn't an IF ISA but an extended S&S ISA that also allowed P2P loans or bonds from any provider providing they meet some standards. These mini bonds only really compete with Bank and Build Society fixed rate savings bonds on providing a better deal without the same guarantees. They could also compete with Cash ISA's fixed term offerings if provided through a IF ISA. Especially as marketed as if they are Bank and Build Society fixed rate savings bonds.
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mason
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Post by mason on Jan 23, 2017 19:08:29 GMT
These mini bonds only really compete with Bank and Build Society fixed rate savings bonds on providing a better deal without the same guarantees. They could also compete with Cash ISA's fixed term offerings if provided through a IF ISA. That's quite an understatement. My understanding is that mini-bonds would tend to sit at the high-risk end of the bond spectrum. Riskier than most ORB listed instruments and not even comparable to deposit accounts. Loss potential is 100%. I obviously don't know the specifics of the SS bond, but if this platform goes pop, I'd feel safer in my current 12% loans than I would in a SS mini-bond. I don't think 6% goes any way to adequately compensate investors for the risk that they will be taking. There is already enough bad press around mini bonds that they could be the next misselling scandal. Even though these are unregulated investments, I'd be surprised if an FCA regulated company would be allowed to get away with marketing them like that.
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nick
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Post by nick on Jan 24, 2017 9:59:48 GMT
A 6% coupon is fairly competitive in the junk bond market so I don't think they are particularly over priced (not that it appeals to my own risk/reward appetite). I assume the funds raised will fund their float (including INPL) which will has been growing with loan volume, rather than as a direct replacement of lenders on the platform.
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twoheads
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Post by twoheads on Jan 24, 2017 10:30:49 GMT
kadhim , I think when SS said the Bond allows investors to indirectly participate in the peer-to-peer marketplace without any active management I think that they meant management by the customer.
The proposed bond will definitely not be a passively managed fund in the normal sense: it will be actively managed by SS and thus carries the associated cost and, presumably, a lower risk. Thus it naturally has a lower return.
The proposed bond is an actively managed fund, relieving the investor of the trouble, and is thus more expensive than the traditional SS P2P investment where the customer manages the investment and carries the extra risk associated with being a non professional investor.
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Post by kadhim on Jan 24, 2017 11:31:16 GMT
kadhim , I think when SS said the Bond allows investors to indirectly participate in the peer-to-peer marketplace without any active management I think that they meant management by the customer.
The proposed bond will definitely not be a passively managed fund in the normal sense: it will be actively managed by SS and thus carries the associated cost and, presumably, a lower risk. Thus it naturally has a lower return.
The proposed bond is an actively managed fund, relieving the investor of the trouble, and is thus more expensive than the traditional SS P2P investment where the customer manages the investment and carries the extra risk associated with being a non professional investor. I'm not sure the risk in the bond is lower. After all it's just a loan to the company. Here's how it seems to me. Anyone funding loans directly is exposed to: a) the risk a loan will go bad; b) the risk that the platform will go bust. In an ideal world, the risk of b) would be zero/minimal because the platform would have a backup servicer in place. Anyone lending to the platform so that it can invest in loans would seem to have the following things to consider: a) loans might go bad; b) you don't know what loans you're exposed to; c) the platform might go bust. In this case, the 'going bust' risk is not zero/minimal because you have no security over the company and no direct recourse to the underlying loans.
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jo
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Post by jo on Jan 24, 2017 11:58:25 GMT
Time-to-deploy funds could be a factor in pricing.
After 1.25yrs and (probably) a lot of work, my xirr is 9 3/4 in SS.
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ganymede
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Post by ganymede on Jan 24, 2017 12:52:55 GMT
kadhim , I think when SS said the Bond allows investors to indirectly participate in the peer-to-peer marketplace without any active management I think that they meant management by the customer.
The proposed bond will definitely not be a passively managed fund in the normal sense: it will be actively managed by SS and thus carries the associated cost and, presumably, a lower risk. Thus it naturally has a lower return.
The proposed bond is an actively managed fund, relieving the investor of the trouble, and is thus more expensive than the traditional SS P2P investment where the customer manages the investment and carries the extra risk associated with being a non professional investor. I'm not sure the risk in the bond is lower. After all it's just a loan to the company. Here's how it seems to me. Anyone funding loans directly is exposed to: a) the risk a loan will go bad; b) the risk that the platform will go bust. In an ideal world, the risk of b) would be zero/minimal because the platform would have a backup servicer in place. Anyone lending to the platform so that it can invest in loans would seem to have the following things to consider: a) loans might go bad; b) you don't know what loans you're exposed to; c) the platform might go bust. In this case, the 'going bust' risk is not zero/minimal because you have no security over the company and no direct recourse to the underlying loans. Just think of the advantages, the mini bond has over the investors. No Recaptcha restrictions. 24/7 internal robots picking from SM market for the bond. Manipulation of SM Market, removal of better loans from the market. Better access to information. Fuller take up of loan allocations. If £100 allocation might see some select £10 some selecting well over £100. Now if all those in the bond get the full £100, then it proportioned amongst the bond holders larger holders of the bond effectively get many times the normal allocation of £100. I probably haven't thought of all the ways. I wouldn't be concerned about looking at the merits of the mini bond, I would be very concerned what the mini bond means to existing investors.
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am
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Post by am on Jan 24, 2017 13:00:19 GMT
kadhim , I think when SS said the Bond allows investors to indirectly participate in the peer-to-peer marketplace without any active management I think that they meant management by the customer.
The proposed bond will definitely not be a passively managed fund in the normal sense: it will be actively managed by SS and thus carries the associated cost and, presumably, a lower risk. Thus it naturally has a lower return.
The proposed bond is an actively managed fund, relieving the investor of the trouble, and is thus more expensive than the traditional SS P2P investment where the customer manages the investment and carries the extra risk associated with being a non professional investor. I'm not sure the risk in the bond is lower. After all it's just a loan to the company. Here's how it seems to me. Anyone funding loans directly is exposed to: a) the risk a loan will go bad; b) the risk that the platform will go bust. In an ideal world, the risk of b) would be zero/minimal because the platform would have a backup servicer in place. Anyone lending to the platform so that it can invest in loans would seem to have the following things to consider: a) loans might go bad; b) you don't know what loans you're exposed to; c) the platform might go bust. In this case, the 'going bust' risk is not zero/minimal because you have no security over the company and no direct recourse to the underlying loans. As I understand (from a glance at Companies House) the bond is being issued by a separate company (in common ownership). So the bond may be closer (not close) in nature to a shareholding in FCIF than a loan to Lendy, i.e. the company issuing the bond participates in loans like we do, rather than lending money to Lendy to lend to borrowers. SS are already taking a fairly large margin. Taking another 3%-6% is large compared to typical actively managed OEIC rates. What would be interesting to know is what investment strategy will be followed by the bond. Will it take 9% loans for which there is less demand, thus allowing Lendy to increase their volume? Will it take 11%-12% DFLs leaving us with the (IMHO) riskier bridging loans. I also see a potential conflict of interest in regards of the discretionary provision fund. How can it be ensured that the bond and retail investors are treated equally with regards to discretionary payments from the fund - at first sight this can only be done by making payments non-discretionary, which runs into the problem that there are (if I understand correctly) legal (tax?) reasons for making the fund discretionary.
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mikes1531
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Post by mikes1531 on Jan 24, 2017 16:50:50 GMT
After 1.25yrs and (probably) a lot of work, my xirr is 9 3/4 in SS. : What value are you placing on your outstanding loans? Especially the ones with negative remaining terms, if you're holding any.
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jo
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Post by jo on Jan 24, 2017 17:15:04 GMT
After 1.25yrs and (probably) a lot of work, my xirr is 9 3/4 in SS. : What value are you placing on your outstanding loans? Especially the ones with negative remaining terms, if you're holding any. Rightly or wrongly, I only use absolute numbers - so, 100% until otherwise and ignore accrued interest. That's not to say I wouldn't sell some loans at a discount if I could.
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Post by thetreasurer on Jan 25, 2017 11:08:39 GMT
6% for the same risk as the 12% to save me a bit of time... nah you're alright.
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