theshape
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Post by theshape on Feb 16, 2018 18:17:19 GMT
The second advance on this loan does seem to be filling fairly slowly - although the recent Bolly/Plymouth news may have spooked investors.I suspect once the 24hr limit is lifted the BHs will snap up a large slice. Don't think there's any 'may' about it. SM sales queues have grown steadily to £2.7m.
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copacetic
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Post by copacetic on Feb 18, 2018 20:10:06 GMT
I think this loan looks ok especially with the planning permission in place and the letter of intent providing a plausible exit strategy. However, with the secondary market looking a bit clogged at the moment, some recent bad news on other loans and 70% left to fill on this one, I wonder what MT's / the borrower's plan is if it fails to fill. Are underwritters going to be called in or are we going to be stuck in a limbo situation unable to develop the land until the loan is refinanced?
I suspect some who have put their original loan parts up for sale have done so with the expectation of cashback on this tranche but this is self defeating on filling the new loan because others see a big sell queue and think there's something wrong with it. Another argument for a variable price SM I suppose since those that are selling might not really want to if they had to do it at a discount.
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Jeepers
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Post by Jeepers on Feb 18, 2018 23:21:33 GMT
Judging by the current state of the SM and that it's not even 30% filled, it will inevitably need CB.
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elliotn
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Post by elliotn on Feb 19, 2018 2:31:40 GMT
Already 13%, I wonder how much headroom MT have.
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p2pmark
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Post by p2pmark on Feb 19, 2018 19:12:04 GMT
I think this loan looks ok especially with the planning permission in place and the letter of intent providing a plausible exit strategy. However, with the secondary market looking a bit clogged at the moment, some recent bad news on other loans and 70% left to fill on this one, I wonder what MT's / the borrower's plan is if it fails to fill. Are underwritters going to be called in or are we going to be stuck in a limbo situation unable to develop the land until the loan is refinanced? I suspect some who have put their original loan parts up for sale have done so with the expectation of cashback on this tranche but this is self defeating on filling the new loan because others see a big sell queue and think there's something wrong with it. Another argument for a variable price SM I suppose since those that are selling might not really want to if they had to do it at a discount. Or a small transaction fee, say 0.25%, to sell. I suspect originally people put their share up for sale thinking they would buy into the new tranche, since that has more retained interest / might offer cashback. This is obviously a very small benefit, but it is enough to encourage a lot of people to sell. Then people saw a large queue and joined in since there's no cost in doing so and it keeps their options open - they can re-buy again if they so wish. But then they don't want to re-buy because the queue is long and there's no liquidity. Then other people thought there might be something wrong with the loan so also joined the queue. And so the queue grows and grows - where it stops nobody knows. I think a small transaction fee would be enough to prevent this from happening in the first place. (Discounts / premiums would help too, but MT don't seem keen on this for a few reasons which have already been discussed.)
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copacetic
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Post by copacetic on Feb 20, 2018 11:59:00 GMT
Or a small transaction fee, say 0.25%, to sell. I suspect originally people put their share up for sale thinking they would buy into the new tranche, since that has more retained interest / might offer cashback. This is obviously a very small benefit, but it is enough to encourage a lot of people to sell. Then people saw a large queue and joined in since there's no cost in doing so and it keeps their options open - they can re-buy again if they so wish. But then they don't want to re-buy because the queue is long and there's no liquidity. Then other people thought there might be something wrong with the loan so also joined the queue. And so the queue grows and grows - where it stops nobody knows. I think a small transaction fee would be enough to prevent this from happening in the first place. (Discounts / premiums would help too, but MT don't seem keen on this for a few reasons which have already been discussed.) While I agree that a transaction fee would reduce this particular problem it just leads to a reduction in the liquidity of the market as a whole unlike a variable SM which self balances supply and demand when new information comes out about a loan. From the platform's perspective it could be a nice little earner but for investors it would be bad overall, simply reducing returns for anyone who uses the SM to rebalance their portfolios. For example I hold several loans I consider good like the Wandsworth loan which I'm confident I could sell in minutes if I needed to raise cash. A sellers fee would just add a cost to me for doing that without providing any benefit to me for that transaction. MT's reasons for not offering a variable SM yet are still valid as they mentioned regulatory reasons were part of it and no consensus from investors swayed them one way or the other. However the current posistion with £3.7m on the SM may stop new loans from filling and that in itself may strongly motivate MT to change their mind.
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p2pmark
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Post by p2pmark on Feb 20, 2018 12:23:22 GMT
I half-agree - any transaction fee does act as a barrier to a functioning market - but overall I feel the benefits outweighs the cons in the absence of premia / discounts.
The fee would ideally be channelled back into the lenders, which I think is quite likely given how competitive the p2p industry is. One option is that a bonus is paid to anybody holding the loan at term. I think this would also help to stop some of the inefficiency we're currently seeing.
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oik
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Post by oik on Feb 20, 2018 12:36:13 GMT
However the current posistion with £3.7m on the SM may stop new loans from filling and that in itself may strongly motivate MT to change their mind. It might, but many MT loans are filled in tranches and there was already a big lump of the holiday development loan on the SM when the latest tranche was issued. I'm not clear how MT would get subsequent tranches away if earlier tranches were available at a discount.
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oik
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Post by oik on Feb 20, 2018 12:45:46 GMT
One option is that a bonus is paid to anybody holding the loan at term. I think this would also help to stop some of the inefficiency we're currently seeing. I like the principle. The problems I see are that the cost would have to come from somewhere else and MT wouldn't know the cost until the end of the term. A good loan that had good DD and went to term without any bad news would cost them more than a bad loan where something nasty was uncovered at a later stage.
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johni
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Post by johni on Feb 20, 2018 12:47:23 GMT
There was no holiday park on the SM until the details of this new tranche was released. At which point a lot of people tried to sell for 2 reasons. Interest being held in advance and a chance of possible cashback. The secondary market glut is accross several platforms not just MT.
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ptr120
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Post by ptr120 on Feb 20, 2018 12:50:04 GMT
I hate to contradict oik but this loan was rarely available on the SM of late until the new drawdown was announced (but by the time it was launched there was a fair queue). In my case I successfully moved (most of) my investment from the first drawdown to the second simply because of the fact that CB might be required to get this away, it is a smaller tranche, and because there is interest on account for this tranche, whereas for the first drawdown interest on account has now been exhausted.
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archie
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Post by archie on Feb 20, 2018 12:52:08 GMT
However the current posistion with £3.7m on the SM may stop new loans from filling and that in itself may strongly motivate MT to change their mind. It might, but many MT loans are filled in tranches and there was already a big lump of the holiday development loan on the SM when the latest tranche was issued. I'm not clear how MT would get subsequent tranches away if earlier tranches were available at a discount. Actually just before the announcement there wasn't a queue. I easily sold some tranche 1 that morning. I doubt there is any benefit from the rolled up interest in tranche 2 as both tranches would default together. If selling fees were introduced, lenders may lend less in the first place which doesn't help MT. Discounts wouldn't work for multi-tranche loans. Personally I always buy less on a variable sm platform and rarely look at buying other than new loans. The queues are large but still moving. I'm currently at the front of two. The main problem at the moment is how much is tied up in defaults.
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Post by Deleted on Feb 20, 2018 12:58:07 GMT
I see absolutely no benefits from a transaction fee, on the other hand it would cost MT money and defocus them from their main business which is getting us great loans. every few months we go though this, "there are too many loans on the SM" then a little later "there are not enough loans on the SM" if you didn't want to invest in the loan why did you? Why are you trying to off load the loan if you wanted it? give us a break, you are trying to fix a non-problem
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oik
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Post by oik on Feb 20, 2018 13:01:54 GMT
There was no holiday park on the SM until the details of this new tranche was released. At which point a lot of people tried to sell for 2 reasons. Interest being held in advance and a chance of possible cashback. The secondary market glut is accross several platforms not just MT. I'm happy to take your word for that but the point remains. It's not clear that if loans can be available on the SM at discount how that will effect subsequent tranches. There many be other points that recommend discounting but I don't see benefits to issuing subsequent tranches as one of them.
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johni
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Post by johni on Feb 20, 2018 13:23:20 GMT
I agree discounting on secondary market may well hit further tranches. If you can buy on secondary market at 1% discount this may stop you buying into the new tranche
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