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The Breadmaster
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Posted - 2011.02.20 16:32:00 -
[1]
Edited by: The Breadmaster on 20/02/2011 16:32:48
Looking to borrow against a stack of bpo's or items:
Who values them?
Who holds them?
Is 110% collateral sufficient?
Is audit necessarry in such a circumstance?
What is a reasonable interest rate?
I want to borrow against mothballed inventory of commodities
for a bit more liquidity. Because of my paranoia, I would
prefer if only the 3rd party knew what I was borrowing
against.
Thanks for your help, MD.
Bread |
Caldariftw123
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Posted - 2011.02.20 16:36:00 -
[2]
Valued against NPC prices check here for some easy price checking place. The rest is a bit subjective .. who do you trust with them, who does MD trust to hold them, do they think 110% is enough, what rate do people want, what rate can you afford to pay etc. .. Do a bit of research, t hinking, post up a reasonable offer and contact one of the third parties like RAW23 for details about the collateral and rates.
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Breaker77
Gallente
Reclamation Industries
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Posted - 2011.02.20 16:38:00 -
[3]
BPOs are valued at NPC price regardless of research on them.
Other materials, it depends on how volatile they are. PI goods, for example, might be valued less than current prices, while faction ships might be close to current prices.
110% collateral is pretty much mandatory.
There are people who hold collateral as a 3rd party. Myself, RAW23, Cosmoray, and others do this.
3rd parties won't reveal the exact item types, but might have to confirm if it's BPOs, or a type of good so investors can determine the risk due to price swings in the market.
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The Breadmaster
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Posted - 2011.02.20 16:42:00 -
[4]
Edited by: The Breadmaster on 20/02/2011 16:44:36
Edited by: The Breadmaster on 20/02/2011 16:42:22
 Originally by: Caldariftw123
Valued against NPC prices check here for some easy price checking place. The rest is a bit subjective .. who do you trust with them, who does MD trust to hold them, do they think 110% is enough, what rate do people want, what rate can you afford to pay etc. .. Do a bit of research, t hinking, post up a reasonable offer and contact one of the third parties like RAW23 for details about the collateral and rates.
Thanks, I didn't know if there were any quick answers.
I'd prefer to start this way, rather than get picked
apart later with an actual offer on the table.
I feel like a certain amount of that can be avoided
if I had a quick instruction on how to proceed rather
than guess and check.
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RAW23
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Posted - 2011.02.20 16:55:00 -
[5]
Pretty much as has been said above.
I charge 5% for loans if I also hold the collateral and I can research your BPOs for you as well if that is what you choose to use for collateral.
If you are willing to deal with the hassle of a bond then you could probably pay a little less interest but will have to pay third party fees.
No audit will be necessary with 110% collateral but rates/collateral amounts might vary somewhat depending on the volatility of the goods.
I strongly suggest the first option 
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Vaerah Vahrokha
Minmatar
Vahrokh Consulting
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Posted - 2011.02.20 21:24:00 -
[6]
If you need collateral evaluation, I do that and even insure it against depreciation. Of course if my studies reveal said collateral is due to tank, I'll value it accordingly. You may find a sample of such insurance here: Link
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Auditing & consulting
When looking for investors, please read
http://tinyurl.com/n5ys4h + http://tinyurl.com/lrg4oz
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Dethmourne Silvermane
Gallente
Northstar Cabal
R.A.G.E
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Posted - 2011.02.21 01:13:00 -
[7]
I'll bandwagon on the "I'll give you a loan @ 5% if I hold the collateral" replies, if you're looking for a smallish loan (1b or less).
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Rakshasa Taisab
Caldari
Sane Industries Inc.
Initiative Mercenaries
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Posted - 2011.02.21 04:21:00 -
[8]
Reading the title, i thought this was a thread worth reading. Turned out it wasn't.
E.g. how do you value (planetary) commodities for collateral when they are expected to rise 2-3 times in price.
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Lt Angus
Caldari
the united
Negative Ten.
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Posted - 2011.02.21 04:27:00 -
[9]
Originally by: Rakshasa Taisab
Reading the title, i thought this was a thread worth reading. Turned out it wasn't.
E.g. how do you value (planetary) commodities for collateral when they are expected to rise 2-3 times in price.
its only relevent if they are expected to fall
How I'd Fix
Shhhh, Im hunting Badgers |
Rakshasa Taisab
Caldari
Sane Industries Inc.
Initiative Mercenaries
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Posted - 2011.02.21 06:18:00 -
[10]
Originally by: Lt Angus
its only relevent if they are expected to fall
Only thing that is relevant is the expected price at maturity...
To say that the pricing will be based on current price has as much assumption of future price point as that of saying it will be based on the price expected once e.g. PV stockpiles starts depleting.
If the 3rd party ends up holding collateral worth twice as much as the loan at the time of maturity, then too much collateral was given. The opposite goes if the value falls.
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Kalrand
GoonWaffe
Goonswarm Federation
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Posted - 2011.02.21 09:09:00 -
[11]
Originally by: Rakshasa Taisab
Originally by: Lt Angus
its only relevent if they are expected to fall
Only thing that is relevant is the expected price at maturity...
To say that the pricing will be based on current price has as much assumption of future price point as that of saying it will be based on the price expected once e.g. PV stockpiles starts depleting.
If the 3rd party ends up holding collateral worth twice as much as the loan at the time of maturity, then too much collateral was given. The opposite goes if the value falls.
A better system than we have now would include reevaluation of the collateral at regular intervals.
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Vaerah Vahrokha
Minmatar
Vahrokh Consulting
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Posted - 2011.02.21 09:28:00 -
[12]
Edited by: Vaerah Vahrokha on 21/02/2011 09:29:28
Originally by: Rakshasa Taisab
Originally by: Lt Angus
its only relevent if they are expected to fall
Only thing that is relevant is the expected price at maturity...
To say that the pricing will be based on current price has as much assumption of future price point as that of saying it will be based on the price expected once e.g. PV stockpiles starts depleting.
If the 3rd party ends up holding collateral worth twice as much as the loan at the time of maturity, then too much collateral was given. The opposite goes if the value falls.
The point of collateral is to provide enforceable security. Period.
If the investee results having given too much security, the investors win and the insurance (if any) wins. The investee knew that this could happen.
On the contrary - as it CAN easily happen - if the collateral tanks the investors find themselves uncovered and the insurance loses.
As lone collateral insurer, I am forced to carefully study the possible depreciation scenarios and this has to be monetized. I also run a way larger risk of losing money because insurance is basically leveraged due to its fee being a fraction of the insured value. Therefore you can stay well sure I'll prefer a comfortable scenario with a margin of collateral value safety vs doing it extra-tight and then losing a lot.
With the above in mind,
Quote:
A better system than we have now would include reevaluation of the collateral at regular intervals
becomes a further expense to me, since periodic analysis costs are > one time. As long as the loan / investment lasts <= 2 months I don't see it worth applying reevaluation. Someone would have to pay for that.
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Auditing & consulting
When looking for investors, please read
http://tinyurl.com/n5ys4h + http://tinyurl.com/lrg4oz
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The Breadmaster
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Posted - 2011.02.21 12:33:00 -
[13]
Edited by: The Breadmaster on 21/02/2011 12:34:17
I think that based on the comments here, that this
would be impossible to manage while maintaining
acceptable: risk to myself, risk to the investor, and
profit.
However, I do appreciate the feedback. Thank you.
Bread
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