Author Topic: Bloomberg: "More Trouble in Bonds Backed by P2P Loans"  (Read 4122 times)

PhilGD

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Bloomberg: "More Trouble in Bonds Backed by P2P Loans"
« on: March 14, 2016, 10:56:15 AM »
The article references research from Morgan Stanley and commentary from Peer IQ and Monja related to credit quality in the P2P space.

The recent trouble referred to in the headline is securitizations of Prosper loans that are on watch for downgrade by Moodys, anda 2015 securitization of CircleBack loans that has hit its cumulative loss trigger earlier than expected.

http://www.bloomberg.com/news/articles/2016-03-14/more-trouble-in-bonds-backed-by-peer-to-peer-loans

Fred

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Re: Bloomberg: "More Trouble in Bonds Backed by P2P Loans"
« Reply #1 on: March 14, 2016, 01:51:55 PM »
IMO, this is the key to Prosper's issue:

Quote
Economic factors may be playing some role in the weakening loan performance, but "the story is in the underwriting," he [James Wu, the founder and chief executive of MonJa] said.

I was very involved in Prosper 1.0, mostly on A and B grades.  I still lost money.  I have been moving my assets to LC.  Never looked back.

Fred93

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Re: Bloomberg: "More Trouble in Bonds Backed by P2P Loans"
« Reply #2 on: March 14, 2016, 03:01:56 PM »
From the article...
Quote
The bonds under review for downgrade by Moody's are known as Citi Held for Asset Issuance, or CHAI. Consisting of loans originated through Prosper Marketplace Inc. ... the bonds were put together by Citigroup Inc. and are three of the 40 or so P2P securitizations currently outstanding, according to data from Morgan Stanley.

Well there's your problem right there.  Citigroup.  Everybody sell Citigroup! 

AnilG

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Re: Bloomberg: "More Trouble in Bonds Backed by P2P Loans"
« Reply #3 on: March 14, 2016, 04:33:46 PM »
Making mountain out of molehill. Out of 15 securitization deals shown in article image, only one has hit the trigger that also from a "me-too" sub-prime platform. None of securitization deals from LC or Prosper are anywhere close to going bad.
 
The article references research from Morgan Stanley and commentary from Peer IQ and Monja related to credit quality in the P2P space.

The recent trouble referred to in the headline is securitizations of Prosper loans that are on watch for downgrade by Moodys, anda 2015 securitization of CircleBack loans that has hit its cumulative loss trigger earlier than expected.

http://www.bloomberg.com/news/articles/2016-03-14/more-trouble-in-bonds-backed-by-peer-to-peer-loans
---
Anil Gupta
PeerCube Thoughts blog https://www.peercube.com/blog
PeerCube https://www.peercube.com

Fred93

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Re: Bloomberg: "More Trouble in Bonds Backed by P2P Loans"
« Reply #4 on: March 14, 2016, 05:16:32 PM »
Making mountain out of molehill. Out of 15 securitization deals shown in article image, only one has hit the trigger that also from a "me-too" sub-prime platform. None of securitization deals from LC or Prosper are anywhere close to going bad.

You make an important point.  The one securitization that article shows crossing the pre-established threshold was MPLT 2015-CB1, and according to http://www.peeriq.com/wp-content/uploads/2016/01/PeerIQ-MPL-Securitization-Tracker-4Q2015.FINAL_.pdf that particular securitization contains loans from CircleBack not Prosper or LC. 


Fred

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Re: Bloomberg: "More Trouble in Bonds Backed by P2P Loans"
« Reply #5 on: March 14, 2016, 11:19:50 PM »
None of securitization deals from LC or Prosper are anywhere close to going bad.

GARST 2014-A and GLCT 2014-A, both by Prosper, are not too far from the their triggers.

P2PFact

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Re: Bloomberg: "More Trouble in Bonds Backed by P2P Loans"
« Reply #6 on: March 17, 2016, 11:04:15 PM »
Does anyone know where to get more info on this ABS deals? For example where did Bloomberg folks find the trigger chart?