Hi @NateHoward and @togbe - I’m happy to provide more color here.
Structure - In place of a bankruptcy remote structure, we have made on-balance sheet loans to borrowers, which are secured by specific assets that have been pledged by these borrowers. These assets vary in nature but typically include some mix of loan receivables, cash in accounts, and physical assets.
These types of structures are more prevalent in emerging markets. Here, in the event of non-performance, we can take possession of the pledged collateral to be made whole but also have direct recourse to the corporate entity. This provides multiple avenues through which we can maximize recovery.
Tugende - As we mentioned in this post, the Tugende default was caused by an inter-company loan made in contravention of our facility agreement and done to support a struggling affiliated entity. This loan took a substantial amount of our security out of our reach. You can read more about this here.
It is also worth mentioning that the writedown to zero was done out of an abundance of caution and not because we had/have a baseline expectation to make zero recovery. We have since shared in this post that we expect a material recovery in the Tugende facility.
Rezi - We are limited in what we can say publicly about Rezi for confidentiality reasons. We have reached out to the Stratos team, and they have said they will follow up with a response.
Junior Capital - Below is a breakdown of the borrower pools outstanding and the breakdown between senior pool capital and backer capital (Junior) in each pool:
| Borrower Pool Name | Senior Pool Capital ($) | Backer Capital ($) |
|---|---|---|
| Tugende | 4,999,425 | 0 |
| Almavest Basket #3 | 1,622,478 | 540,826 |
| Lend East #1: Emerging Asia Fintech Pool | 8,120,000 | 2,030,000 |
| Cauris Pool #1 | 3,857,005 | 1,285,669 |
| Almavest Basket #4 | 7,499,991 | 2,499,997 |
| Cauris Fund #4: Africa Innovation Pool | 0 | 2,126,664 |
| Almavest Basket #5 | 3,750,000 | 1,250,000 |
| Almavest Basket #6 | 9,449,814 | 2,362,453 |
| Cauris Fund #2: Africa Innovation Pool | 8,000,000 | 2,000,000 |
| Almavest Basket #7: Fintech and Carbon Reduction Basket | 8,000,000 | 2,000,000 |
| Asset-Backed Pool via Addem Capital | 8,000,000 | 2,000,000 |
| Fazz | 0 | 1,347,026 |
| Secured U.S. Fintech Yield via Stratos | 15,961,390 | 3,990,348 |
| Total | 79,260,103 | 23,432,983 |