Lenndy Notice to Investors

Go back Fri, 2021-02-12

Dear Investors,


Global COVID-19 pandemic of 2020 brought unprecedented challenges to the global business community. Unfortunately, Lenndy loan originators and borrowers were not an exception. As a result of economic lock-downs and loan repayment moratoriums in some of our markets, many borrowers delayed or defaulted on theirs repayments, causing substantial reductions of cash-flow to loan originators, who sell their claims on Lenndy platform. As a result, as You have already been informed by our previous letters, one of the loan originators FirstFinance faced financial difficulties and were not able to fulfil its buy-back obligations in timely manner.

 

Moreover, Lenndy has been notified that loan originators in some of our markets have been facing regulators’ scrutiny pertaining to the claim buy-back model, which, in the opinion of the regulatory institutions, may be considered risky to the investors and may even raise compliance issues.

 

In order to address these issues and secure investors’ interests, Lenndy decided to stop listing new loans with buy-back guarantees within shortest possible terms. Respective changes of Lenndy terms and conditions shall be announced shortly.

Also, in order to maximize recovery of investor’s capital and address the financial issues, faced by some loan originators, a decision was made to buy-back all currently outstanding loans with buy-back guarantees. Lenndy is currently in the process of negotiations with loan originators regarding conditions of such buy-back. In any event, Lenndy shall seek to implement the buy-back program and distribute the funds to the investors within shortest possible deadlines, taking into account the ongoing global pandemic and financial means of specific loan originators. The recovered funds shall be distributed on the basis of the following principles of fairness and proportionality:

  1. To mitigate capital losses, as a matter of priority, the principal amount of the loan shall be covered by funds, received from loan originators and distributed by Lenndy;
  2. Lenndy shall ensure that all funds, received from loan originators, are distributed to the investors in proportion to the size of their portfolio.

 

With regard to the situation of loan originator FirstFinance, Lenndy already took the following action:

  1. Initiated financial audit of FirstFinance, which is currently carried out and expected to be finalized until end of April, 2021;
  2. Received preliminary financial accounts of FirstFinance for financial year 2020 and is carrying out evaluation thereof;
  3. Identified preliminary amount of problematic loans to be written-off (subject to final findings of the audit) – aprox. 1,7 mln. Eur;
  4. Remaining claim portfolio, managed by the FirstFinance (after write-offs) – 8,08 mln. Eur (subject to final findings of the audit);
  5. Held periodic meetings with management of the FirstFinance in order to ensure timely exchange of information and find optimal solutions;
  6. Launched secondary market of loans, held by investors, to ensure maximum liquidity and provide opportunities for faster recovery of investments.

 

Please note that FirstFinance loans without buy-back guarantees are not affected by these changes and shall be covered in usual manner.

Despite the many challenges of 2020, Lenndy team is enthusiastic about the work ahead. We shall keep you updated on further developments.

 

Lenndy Team