sl75
Posts: 2,092
Likes: 1,245
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Post by sl75 on Jan 20, 2021 18:48:19 GMT
Whatever the figures, I'd be astounded if Shawbrook purchased the loanbook at 'par' and, if they didn't, how's the gap going to be covered? Based on later RateSetter announcement, there is no "gap" to be covered.
I'd also imagine the entire transaction value wasn't at "par", but the gap you perceive would be covered by a combination of: - losses already accounted for in the PF for defaults that have already been paid out. - any difference between the accounting value within the PF for those defaulted loans and the ~£3M of cash they said it received as a result of the deal after paying all of us.
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Post by herringbone on Jan 21, 2021 11:52:27 GMT
I've voted Yes. RS seem to have acted honourably towards all parties: investors, borrowers and by finding jobs for their own team.
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coogaruk
Hello everyone! Anyone remember me?
Posts: 705
Likes: 464
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Post by coogaruk on Jan 21, 2021 17:58:20 GMT
As I understand it existing retail investors are only reinvesting into existing loans, with all new RS unsecured lending now being undertaken and funded by their puppetmaster owner (Metro Bank). I think there were a few lending channels (e.g. GiffGaff?) where MB didn't take this over so there may still be a trickle of new lending, but I understand the bulk is indeed reinvestment into existing loans. The GiffGaff loans were discontinued last November, even before Shawbrook purchased the property portfolio. All new unsecured lending is now funded by MB.
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Post by oppsididitagain on Jan 27, 2021 9:50:23 GMT
RS going to Full interest. So Happy I still have money earning over 6%
We are announcing an end to the Stabilisation Period, with a return to full interest for investors from 28 January 2021.
The temporary interest reduction was introduced on 4 May 2020, with half of investors’ interest going to the Provision Fund in order to provide for the expected impact of the Covid-19 pandemic on the loan portfolio. At the time, we estimated that the interest reduction would need to last until the end of 2020. On 3 November 2020, we gave an update that we were not able to change the reduction yet and that we would review it every quarter.
We undertook the first quarterly review last week, alongside the Executive Credit Committee’s scheduled month end Provision Fund review. The Interest Coverage Ratio as at the end of December 2020 stood at 101% (up from 92% in November) and the Capital Coverage Ratio 180% (up from 166%). In light of the Interest Coverage Ratio returning above 100% for the first time since the pandemic it was agreed to end the interest reduction.
Since its drop (to 74%) following the pandemic outbreak last March, the Interest Coverage Ratio has risen above 100% thanks to the interest reduction itself, the performance of the consumer portfolio and portfolio sales that have been executed ahead of expectations.
With all new lending being funded by Metro Bank following its acquisition of RateSetter in September 2020 and the investor portfolio now in run-off, our target is to keep the Interest Coverage Ratio at or just above 100%.
Although we are ending this interest reduction period, we will keep monitoring performance actively and prudently. Should conditions deteriorate in the future we will introduce another interest reduction with the objective of returning the Interest Coverage Ratio to 100%.
Thank you for being a RateSetter investor. Our overriding objective throughout this downturn has been to protect your money and keep it earning a positive return which is being achieved. We will continue to provide the monthly Provision Fund update as the portfolio runs off.
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