P2P: Ablrate

Plus

Just a curiosity... how does Ablrate handle currency fluctuations?

Say they advertise an aircraft loan at 10%. Ablrate investors deposit in GBP, but the price of the aircraft is in USD and the repayments are too. Let's say the dollar weakens by 20%. Now the investors are only getting a yield of 8% in GBP terms and there isn't enough capital to pay them back at the end.

In the bond markets that's a risk investors face, but I don't see how it works in the Ablrate market which is strictly GBP. Do they fully hedge all of the currency risk?

AlanP_2

Plus wrote: »

Just a curiosity... how does Ablrate handle currency fluctuations?

Say they advertise an aircraft loan at 10%. Ablrate investors deposit in GBP, but the price of the aircraft is in USD and the repayments are too. Let's say the dollar weakens by 20%. Now the investors are only getting a yield of 8% in GBP terms and there isn't enough capital to pay them back at the end.

In the bond markets that's a risk investors face, but I don't see how it works in the Ablrate market which is strictly GBP. Do they fully hedge all of the currency risk?

I don't know the answer but on the ABL section of the p2pindependentforum the ABL reps actively participate and are very helpful if you wanted to ask on there.

masonic

Plus wrote: »

Just a curiosity... how does Ablrate handle currency fluctuations?

Say they advertise an aircraft loan at 10%. Ablrate investors deposit in GBP, but the price of the aircraft is in USD and the repayments are too. Let's say the dollar weakens by 20%. Now the investors are only getting a yield of 8% in GBP terms and there isn't enough capital to pay them back at the end.

In the bond markets that's a risk investors face, but I don't see how it works in the Ablrate market which is strictly GBP. Do they fully hedge all of the currency risk?

The interest and capital repayments are in GBP, so lenders will not get variable returns. However, the currency risk could cause the borrower to default on the loan, and impact the value of the security. How this is mitigated varies from loan to loan. Last time I checked loans involving currency risk were few and far between.

takesyourchances

With only opening Ablrate recenlty, I have invested in one new loan so far, I am think it is worth paying a small premium on the secondary market which has quiet a few offerings to get a few loans underway and investments slowly built up while awaiting new fresh loans to appear.

Would this be how some of you would of done it when starting off with Ablrate?

The interface is a little different to MT and Collateral and figuring out the costs of the secondary market but after looking around it has become more clear now.

Thanks

Flobberchops

takesyourchances wrote: »

I am think it is worth paying a small premium on the secondary market which has quiet a few offerings to get a few loans underway and investments slowly built up while awaiting new fresh loans to appear.

Would this be how some of you would of done it when starting off with Ablrate?

Yes, this has been my approach as well. I favour new (primary market) loans but I do also buy on the SM to get diversification.

The way Albrate's SM discount/premium works is a bit clunky, you have to work out the exact amount you'll pay through trial and error - it would be very useful if they had the option to enter the amount of cash you had to invest, and they'd return the figure your money would actually buy, as opposed to the current system which is vice-versa. But, that's a minor gripe really.

The seller premium normally equates to a month's interest or thereabout, which I think is reasonable for the sake of diversifying... and if there's nothing on the primary market your money would be sitting there not earning, anyway.

elephantrosie

do we have to pay when we buy loans on secondary market on ablrate?

elephantrosie

do collateral uk send out emails when there is new loans?

takesyourchances

Flobberchops wrote: »

Yes, this has been my approach as well. I favour new (primary market) loans but I do also buy on the SM to get diversification.

The way Albrate's SM discount/premium works is a bit clunky, you have to work out the exact amount you'll pay through trial and error - it would be very useful if they had the option to enter the amount of cash you had to invest, and they'd return the figure your money would actually buy, as opposed to the current system which is vice-versa. But, that's a minor gripe really.

The seller premium normally equates to a month's interest or thereabout, which I think is reasonable for the sake of diversifying... and if there's nothing on the primary market your money would be sitting there not earning, anyway.

I had a go there and put a small bit into one of the aircraft loans, I just typed the amount to buy and calculate and it gave me the total, then I transferred my amount from my debit card and bought it after. I'd agree, a sellers premium is reasonable at around a months for the sake of diversifying. I want to try and get some non property loans built up as well for diversufying.

I'd also favour the new primary market, but if the deal rate is slow it will take me for ever to build my account up so will buy bits on the SM while waiting and between new loans appearing.

Thanks

takesyourchances

elephantrosie wrote: »

do collateral uk send out emails when there is new loans?

elephantrosie wrote: »

do we have to pay when we buy loans on secondary market on ablrate?

The amount varies per loan on the SM, have a play around and type the amount in your interested on a loan on the SM and it will give you the overall amount. That is what I done before buying a bit to try, then I paid that amount into my account and bought it.

Also on your other question, yes Collateral send out emails and I also check http://p2pindependentforum.com/ for listings coming up.

Thanks

jamesd

elephantrosie wrote: »

do we have to pay when we buy loans on secondary market on ablrate?

Nothing to Ablrate, just to the people you're buying the loan off.