Price Discovery for Social Lending

BondPicking.com

BondPicking.com

Bondora Secondary Market Analysis

All Grades Notes Overview: XIRR | Markup





BondPicking.com is free independent market analysis tool to help investors price their loans and evaluate opportunities on Bondora p2p social lending 24/7 secondary market.

→ Free online Bondora analysis
→ Monitor daily market rates
→ Bond grades A+ to HR--
→ Pricing in XIRR and markup

Dataset timestamp: 2016-09-28

For explanation of charts see FAQ below.

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FAQ

What does it all means?

Simply put we track all trades on Bondora secondary market to analyse what was market price. In case of loan parts price can be measured as average discount or XIRR (extended internal rate of return). Only sucessfully completed transaction on secondary market are taken into account.

How can it help me?

We believe that price discovery and effective market needs information. Our analysis shows movement of typical prices of asset in each particular class over time. We supply the market rates so you can decide quickly, trade more efficiently and with higher turnover and profit.

What is Bondora?

Bondora (formerly IsePankur) is Estonian social lending platform that offers peer to peer trading of bonds (notes). It meets borrowers with investors on primary market. Further, investors can resale notes in auction. Our tool is focused on this secondary market.

Understanding charts

Graph legend ... please mind that XIRR/Markup and Day/Week interval are user switchable. 1-Day interval uses SMA 50 and 1-Week SMA 12 and this is the reason current market rate differs when using other interval.
Explanation of charts

What is asset class (grade)?

To simplify classification we have separated each Bondora rating category into 3 batches according to borrowers morale and repayment discipline. So first part of asset class identification /the letter/ is according to Bondora Rating (and it was assigned at the date of loan issuance). Second part (plus, minus, double minus) differentiates bad payment history from good. For example given A Bondora rating:

A+ Borrower has never been late with payment. Superb payment morale. (InDebt1Day = 0)
A- Borrower has been overdue for 1 - 29 days at one point in loan history. (InDebt1Day = 1 AND InDebt30Day = 0)
A-- Borrower has been late with payment 30+ days at one point. (InDebt30Day = 1)

What is XIRR?

Internal rate of return shows us annualized return on the investment taking account net present value of cashflow (future costs and incomes). Its good choice when comparing different investments. Read more in Wikipedia.

What is markup and discount?

You are not limited to trade exactly for the principal value (face value, aka at par). Quality loans are usually traded above par value. Bondora allows seller to choose markup (add % margin to principal) or discount (subtract % discount from principal) to sell loan part for more (with markup) or cheaper (with discount). Markup is capital profit for seller. Discount is capital profit for buyer. When putting securities on secondary market you can choose discount/markup as a percent of principal.

How is XIRR and discount related?

Discounted price offers discount to buyer and leads to lower price of bond. Markup offers profit for the seller and leads to higher price of loan part. The lower the price of the bond the higher the return on investment for the buyer (XIRR).

Highest XIRR is the cheapest bond, right?

Exactly. XIRR reflects risk factor tangled with the security. Buyers demand higher XIRR to compensate for holding riskier bonds. Thats why best grade (A+) securities in theory offer lowest yield (or return measured as XIRR) with lowest risk. As a seller you can lower the price (give discount) in order to raise potential buyer's XIRR.

How often is this updated?

We constantly monitor new updates to Bondora export datasets and we usually offer our analysis the very same day Bondora publishes update. Unfortunately we don't have any other option to get the data and sometimes Bondora download page lacks actual data for few days or weeks.

Last update of Bondora data published is currently: 2016-09-28

I need to analyse primary market, can you help?

Its all about "bond picking" and filtering bad loans. Find strategy that suits your risk apetit and filter using the dataset. One thing you can do is backtesting your filters. You can try peerlan.com which focuses on filtering and statistics of originated loans. Here at BondPicking.com we offer real market prices so you can compare opportunities on primary auction to benchmarks set by current secondary market rates.

How can I get in touch with you?

We are always looking forward to hearing your experience with our trading tools. Please e-mail us at info@bondpicking.com.


Disclosure: We are not registered financial advisor and strictly do not offer investment advice.
We offer independent fintech market research using our algorithmic and machine learning systems.
Our goal is to provide missing links through analytical engine to better understand world markets data.
This site is not affiliated with Bondora.com. Bondora is registered trademark of IsePankur s.a.


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