The Secondary Market provides Bondora investors a way to buy and sell loans when needed. This creates opportunity for investors on both sides of a trade: those who are in search of liquidating loans, and those in search of obtaining more loans which have already been issued. Bondora’s Secondary Market for peer-to-peer loans is operated via API integration, the Portfolio Manager investment option, or manual purchasing by investors.
Over the past several months, Bondora’s Secondary Market has held strong. November’s total transactions on the Secondary Market were up slightly from the previous month, to €1,171,074. Most notably, manual purchases in the Secondary Market were up over 7% to €734,635 on the month, while purchases made via the API and Portfolio Manager were down slightly over the same time period.
Let’s take a look at the breakdown of the Secondary Market based on loan status to give us more insight into how investors were buying and selling Bondora loans in November.
As expected, the majority of current loans (56.5%) were purchased at par value in November. Although the majority of current loans were purchased manually, the single biggest category of current loan purchases were Portfolio Manager purchases at par value. Additionally, manual investors were able to purchase current loans at a discounted rate more often than API or Portfolio Manager transactions.
Overdue loan transactions actually decreased slightly from the previous month, totaling €62,794 in November. Bondora has kept the standard of not making purchases of overdue loans via Portfolio Manager, and since API purchases on overdue loans were miniscule (3.6%), almost all loans were purchased manually and at a discount. Manual purchases in total accounted for 96.4% of all overdue loan transactions, totalling €60,558.
Similarly to overdue loans, Bondora’s Portfolio Manager option does not make any purchases of defaulted loans, leaving all Secondary Market default loan purchases made via manually or via the API. Loans which are in default do not have an active cash flow (unless it’s from recovery payments), and therefore, are almost always purchased at a discount. €225,327 of the total €257,319 in defaulted loans, or, 87.6%, were purchased at a discount. Almost all defaulted loans in November were purchased manually (99.5%) as API investors stayed away from defaulted loans.
The Secondary Market Remains Steady
The Secondary Market statistics in November did not deviate greatly from previous months, and as expected trends continued to hold. Most Secondary Market purchases are made manually, however we’d still urge investors to refrain from chasing a higher return by making manual transactions – often this can result in a negative impact on your portfolio if you’re unsure what you’re doing. This being said, it’s not just buyers who benefit from the Secondary Market. Existing investors are able to obtain earlier liquidity by offering their loans on the Bondora marketplace for sale.
If you are interested in buying or selling your loans on the Bondora secondary market you can find more information here, or get in touch with an experienced Investor Relations Associate at [email protected] to learn more.