Lending – Guide Global http://guideglobal.com/ Fri, 28 May 2021 20:28:58 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.2 https://guideglobal.com/wp-content/uploads/2021/05/default1.png Lending – Guide Global http://guideglobal.com/ 32 32 How Payday Loan Interest Rates Vary Between States https://guideglobal.com/how-payday-loan-interest-rates-vary-between-states/ https://guideglobal.com/how-payday-loan-interest-rates-vary-between-states/#respond Fri, 14 May 2021 08:10:18 +0000 https://guideglobal.com/?p=625 Payday loan interest rates in the United States vary from state to state. Whilst payday loans are strictly governed, or even outlawed entirely, in some states, in others, APR can sometimes be over 600%. Ubiquity of Payday Loans Payday loans, thanks to how easy they are to obtain, are becoming increasingly common. The volume of […]]]>

Payday loan interest rates in the United States vary from state to state. Whilst payday loans are strictly governed, or even outlawed entirely, in some states, in others, APR can sometimes be over 600%.

Ubiquity of Payday Loans

Payday loans, thanks to how easy they are to obtain, are becoming increasingly common. The volume of people depending on these types of loans is thought to have tripled since the coronavirus pandemic according to research from Gusto. Only 2% of these workers had used a payday loan before the pandemic.

According to the Consumer Financial Protection Bureau, 1 in 4 payday loans are re-borrowed nine times, if not more. It takes borrowers an average of 5 months to pay off their loans and they pay $520 in finance charges, on average. Thus, it is easy to see how these borrowers can easily enter a spiral of debt.

It is clear that these loans can cause a huge negative impact on borrowers. Charla Rios, a researcher with CRL, says that “in addition to the repeat borrowing…there’s an increase in the chances of overdrafts, losing a bank account, bankruptcy and difficulty paying bills.”

She continues: “People are financially strained right now and we also know the outcome and the harms of payday loans, so these loans are not a solution for the time that we’re in”.

Clamping Down on Payday Loan Interest Rates

Over the last year, many states have started to clamp down on what has become known as “predatory lending” by introducing specific laws relating to payday loans. 

Payday loan lenders have a reputation for taking advantage of people down on their luck financially by charging sky-high interest rates which are impossible to repay.

Payday loans are still widely available across the United States with over half of US states offering restriction-free loans. For many bad credit lender, all that is required is a valid form of ID, an existing bank account and proof of income.


In an effort to strive for more responsible lending practices, the Center for Responsible Lending analysed the average APR across different states based on a 14-day loan of $300. They revealed that due to the “finance charges” incurred for each loan, many consumers are oblivious to how much interest they are really paying.

Risk of Predatory Lending 

Statistics from CRL suggest that there are around 200 million Americans currently living in states where payday lending is not heavily regulated. This means that an increasingly high volume of Americans are at risk of predatory lending, sometimes with triple-digit interest rates.

Texas payday loans have the highest rates of any state, with a typical APR of 664%. As a reference, this figure is 40 times more than the average credit card interest rate (16.12%). Formerly, the highest payday loan rates were in Ohio, with an average of 677%; although, this has since been brought down substantially to 138%.

Capped Interest Rates

Certain states have already been regulating payday loan interest rates for some time. These are Arkansas, Arizona, Colorado, Connecticut, Georgia, Maryland, Massachusetts, Montana, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, South Dakota, Vermont, West Virginia and the District of Columbia. In these states, payday loan interest rates are capped at 36% or lower.

More recently, Nebraska’s November general election saw its voters overwhelmingly opt to cap payday loan interest rates at 36%. This was a huge drop from the previous average APR in Nebraska which was a staggering 404%.

January 2021 saw Illinois follow suit, passing a bill to cap rates on consumer loans, including both payday and car title, at 36%. Although the bill is still pending a signature from the Governor, it will make Illinois the latest state to clamp down on payday loan interest rates.

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Navient Student Loan Trust 2021-2 — Moody’s assigns provisional ratings to Navient Student Loan Trust 2021-2 https://guideglobal.com/navient-student-loan-trust-2021-2-moodys-assigns-provisional-ratings-to-navient-student-loan-trust-2021-2/ https://guideglobal.com/navient-student-loan-trust-2021-2-moodys-assigns-provisional-ratings-to-navient-student-loan-trust-2021-2/#respond Fri, 14 May 2021 07:16:46 +0000 https://guideglobal.com/?p=589 Rating Action: Moody’s assigns provisional ratings to Navient Student Loan Trust 2021-2Global Credit Research – 07 Apr 2021Approximately $762.3 million of asset-backed securities ratedNew York, April 07, 2021 — Moody’s Investors Service, (“Moody’s”) has assigned a provisional rating of (P)Aaa (sf) to the Class A-1A, Class A-1B, and Class B notes to be issued by […]]]>

Rating Action: Moody’s assigns provisional ratings to Navient Student Loan Trust 2021-2Global Credit Research – 07 Apr 2021Approximately $762.3 million of asset-backed securities ratedNew York, April 07, 2021 — Moody’s Investors Service, (“Moody’s”) has assigned a provisional rating of (P)Aaa (sf) to the Class A-1A, Class A-1B, and Class B notes to be issued by Navient Student Loan Trust 2021-2. The underlying collateral consists of Federal Family Education Loan Program (FFELP) non-consolidation and consolidation student loans.Moody’s issues provisional ratings in advance of the final sale of securities. Upon a conclusive review of the final documentation, Moody’s will endeavor to assign final ratings to the securities. Final ratings may differ from provisional ratings.The complete rating actions are as follows:Issuer: Navient Student Loan Trust 2021-2Fixed Rate Class A-1A Notes, Assigned (P)Aaa (sf)Floating Rate Class A-1B Notes, Assigned (P)Aaa (sf)Floating Rate Class B Notes, Assigned (P)Aaa (sf)RATINGS RATIONALEThe ratings are based on the underlying collateral consisting of FFELP student loans, which are indirectly guaranteed by the U.S. Department of Education for a minimum of 97% of defaulted principal and accrued interest; the overcollateralization of the trust, which is expected to have an initial parity level of 103.1%; a reserve account funded at 3.35% of the initial pool balance that steps down successively to 1.00% of the pool balance on the September 2023 distribution date and to 0.65% of the pool balance on the April 2032 distribution date, and has a floor of approximately $0.76 million; excess spread that is expected to average between 1.3% and 1.5% basis points per annum that is trapped to a target overcollateralization level of the greater of 3.01% of the adjusted pool balance and $5.7 million, and is used on or after the April 2027 distribution date to exclusively pay down bonds. The ratings are also based on the expertise and experience of Navient Solutions, LLC (formerly known as Navient Solutions, Inc.), which is one of the largest FFELP and Direct Loan servicer, as the servicer for this transaction.The expected net loss on the loan pool to be securitized is approximately 0.8%, similar to the prior Navient FFELP deal.The COVID-19 pandemic has had a significant impact on economic activity. Although global economies have shown a remarkable degree of resilience to date and are returning to growth, the uneven effects on individual businesses, sectors and regions will continue throughout 2021 and will endure as a challenge to the world’s economies well beyond the end of the year. While persistent virus fears remain the main risk for a recovery in demand, the economy will recover faster if vaccines and further fiscal and monetary policy responses bring forward a normalization of activity. As a result, there is a heightened degree of uncertainty around our forecasts. Our analysis has considered the effect on the performance of consumer assets from a gradual and unbalanced recovery in US economic activity. Specifically, for FFELP student loan ABS, loan performance will continue to benefit from government support and the improving unemployment rate that will support the borrower’s income and their ability to service debt. However, any elevated use of borrower assistance programs to affected borrowers, such as forbearance, deferment and income-based repayment (IBR), may adversely impact scheduled cash flows to bondholders.We regard the COVID-19 outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety.The ratings consider high social risk attributable to the debt burden of student loans and the affordability of education in the US. Potential regulatory or legislative changes could impact funds available to the trust.Rating MethodologyThe principal methodology used in these ratings was “Moody’s Approach to Rating Securities Backed by FFELP Student Loans” published in May 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBS_1226065. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.Factors that would lead to a downgrade of the ratings:Because the US Department of Education guarantees at least 97% of principal and accrued interest on defaulted loans, Moody’s could downgrade the ratings of the notes if it were to downgrade the rating on the United States government. Moody’s could downgrade the ratings if performance is materially worse than it currently expects, specifically, if the usage of borrower relief programs such as forbearance, deferment and IBR is higher than anticipated, net losses or voluntary prepayments are higher than it currently expects, or if the loan pool pays down too slowly to pay off the notes by maturity. In our analysis, we applied incremental stresses to our typical cash flow assumptions in consideration of a likely slowdown in borrower payments brought on by the economic impact of the COVID-19 pandemic.REGULATORY DISCLOSURESFor further specification of Moody’s key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody’s Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.Further information on the representations and warranties and enforcement mechanisms available to investors are available on http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBS_1275871.In rating this transaction, Moody’s used a cash flow model to model cash flow stress scenarios to determine the extent to which investors would receive timely payments of interest and principal in the stress scenarios, given the transaction structure and collateral composition.Moody’s quantitative analysis entails an evaluation of scenarios that stress factors contributing to sensitivity of ratings and take into account the likelihood of severe collateral losses or impaired cash flows.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider’s credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.These ratings are solicited. Please refer to Moody’s Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody’s general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.At least one ESG consideration was material to the credit rating action(s) announced and described above.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s affiliates outside the EU and is endorsed by Moody’s Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody’s office that issued the credit rating is available on www.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s affiliates outside the UK and is endorsed by Moody’s Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody’s office that issued the credit rating is available on www.moodys.com.Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody’s legal entity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. Selven Veeraragoo Asst Vice President – Analyst Structured Finance Group Moody’s Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Joseph Grohotolski Vice President – Senior Analyst Structured Finance Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody’s Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 © 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.CREDIT RATINGS ISSUED BY MOODY’S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. 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Wilmington Trust Convictions Appeals Panel Says https://guideglobal.com/wilmington-trust-convictions-appeals-panel-says/ https://guideglobal.com/wilmington-trust-convictions-appeals-panel-says/#respond Wed, 07 Apr 2021 23:16:33 +0000 https://guideglobal.com/wilmington-trust-convictions-appeals-panel-says/ Randall Chase | Associated press News Headlines June 30, 2020 Here are some of the top stories we’re following for Tuesday, June 30, 2020. Jenna Miller, Wochit DOVER – Lawyers representing former executives of the only financial institution to face criminal charges under the federal bank bailout program have asked a panel of the Federal […]]]>

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DOVER – Lawyers representing former executives of the only financial institution to face criminal charges under the federal bank bailout program have asked a panel of the Federal Court of Appeal to overturn their convictions.

Defense lawyers argued on Tuesday that prosecutors had failed to prove that former Wilmington Trust executives deliberately lied to federal regulators about the extent of the bank’s delinquent commercial real estate loans before Wilmington Trust did ‘imploded and was hastily sold in 2011.

EARLIER: Former Wilmington Trust Executives Prepare for Fight in Philadelphia Court of Appeals

The term “overdue” was not clearly defined in the reporting requirements for submitting documents to the Securities and Exchange Commission and the Federal Reserve, and prosecutors therefore failed to prove beyond a reasonable doubt. that the defendants had made false statements, defense lawyers say.

“The term ‘past due’ can be reasonably interpreted as not including the loans at issue here, and the available regulatory guidance did not unambiguously require the reporting of these loans,” said George Hicks Jr., counsel for the former Wilmington Trust Credit Manager. William North.

Assistant U.S. Attorney Robert Kravetz noted that the trial judge found that the defendants’ interpretation of the overdue term was not “logical” and that there was no ambiguity in the requirements for reports.

“Rather, the instructions specifically tie the past due status to the loan agreement and the payment, or lack thereof, of interest or principal,” Kravetz said, citing a ruling by U.S. District Judge Richard Andrews.

ALSO: The lawsuit paints an unflattering image of Wilmington Trust

A three-judge panel from the Third Circuit court took the case under advisement after hearing arguments for more than two hours. The panel initially only allowed lawyers 20 minutes per side.

“We recognize that this is an important case,” said Judge Cheryl Ann Krause.

North, former Wilmington Trust bank chairman Robert Harra Jr., former CFO David Gibson and former Controller Kevyn Rakowski were convicted in May 2018 of fraud, conspiracy and misrepresenting federal regulators.

Harra and Gibson were sentenced to six years in prison. North was sentenced to 4.5 years and Rakowski to 3 years. All four have remained free on bail pending their appeals.

AS WELL AS: Wilmington Trust defendants say ‘mistake’ by Delaware judge led to conviction

The bank itself reached a $ 60 million settlement with prosecutors, without acknowledging any responsibility, just as a trial was due to begin.

Prosecutors alleged that following the 2008 financial crisis, bank executives misled regulators and investors about Wilmington Trust’s massive amount of delinquent commercial real estate loans before the bank was shut down. hastily sold in 2011, on the verge of collapse. Founded by members of the DuPont family in 1903, the bank imploded despite receiving $ 330 million from the federal government’s distressed asset relief program.

After the trial, Andrews dismissed the defense motions for acquittal judgments or a new trial. He rejected defense arguments that the instructions for filing reports with the Federal Reserve, including quarterly financial documents known as appeal reports, and for disclosing financial information in filings with the Securities Exchange Commission, were ambiguous. He also found that there was sufficient evidence for a rational jury to conclude that the defendants had acted with the requisite criminal intent.

“The defendants knew they were dishonest,” he wrote.

Prosecutors argued that instead of reporting the actual amount of delinquent loans, bank officials had “exempted” millions of dollars of overdue loans from reporting obligations if the loans were designated as “short-interest” and being extended – even though the necessary paperwork had not been done. To ensure that loans well beyond their repayment date were up to date for interest and therefore allegedly exempt from reporting obligations, the bank loaned even more money to struggling promoters just so they could pay interest on the underlying loans.

In the fourth quarter of 2009, Wilmington Trust officials reported just $ 10.8 million in commercial loans 90 days or more past due, concealing more than $ 316 million in delinquent loans subject to the forgiveness practice, according to prosecutors.

Defense attorneys argued that the practice of waiver had been in place for decades and was no secret.

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Pete Davidson plans comedy show lineup in Philadelphia with ‘The King of Staten Island’ co-star https://guideglobal.com/pete-davidson-plans-comedy-show-lineup-in-philadelphia-with-the-king-of-staten-island-co-star/ https://guideglobal.com/pete-davidson-plans-comedy-show-lineup-in-philadelphia-with-the-king-of-staten-island-co-star/#respond Wed, 07 Apr 2021 23:16:09 +0000 https://guideglobal.com/pete-davidson-plans-comedy-show-lineup-in-philadelphia-with-the-king-of-staten-island-co-star/ STATEN ISLAND, NY – Philadelphia will receive The King of Staten Island treatment this weekend. Saturday Night Live comedian and Staten Island native Pete Davidson will join his “The King of Staten Island” co-star Ricky Velez in a stand-up comedy lineup at Punch Line Philly on Friday, November 20 and on Saturday, November 21. The […]]]>

STATEN ISLAND, NY – Philadelphia will receive The King of Staten Island treatment this weekend.

Saturday Night Live comedian and Staten Island native Pete Davidson will join his “The King of Staten Island” co-star Ricky Velez in a stand-up comedy lineup at Punch Line Philly on Friday, November 20 and on Saturday, November 21. The shows will take place at 4 p.m., 6:30 p.m. and 8:45 p.m. each day. All shows will be held outdoors maintaining a socially remote protocol due to the coronavirus pandemic (COVID-19).

Tickets for all four evening shows have sold out, and in response, two 4 p.m. shows have been added. The cost of tickets is $ 52 and they can be purchased here.

Staten Islanders Eric D’Alessandro and Nicky Paris recently performed at Punch Line Philly, a venue located nearly two hours from the Borough. Ricky Velez performed on Staten Island in July 2019, when “The King of Staten Island” cast and director Judd Apatow performed at the St. George Theater for a charity performance benefit Friends of firefighters.

The show took place during the filming of “The King of Staten Island” in the borough. The film, loosely based on Davidson’s life, skipped its theaters due to the pandemic and became available through on-demand services June 12.

“The King of Staten Island” was directed by Apatow and co-written by Davidson, Apatow and former “SNL” scribe David Sirus.

Davidson, who is from Great Kills, stars in the film with Velez, Marisa Tomei, Bill Burr, Moisés Arias, Steve Buscemi, Kelly machine gun and Maude Apatow, daughter of Judd and star of HBO’s “Euphoria”.

Apatow’s vision for the film has been compared to Amy Schumer’s “Trainwreck,” giving Davidson a chance to play a version of himself to tell his story through dramatized experiences.

Davidson’s story includes his hero father, firefighter Scott Davidson, who was killed in the 9/11 attacks. The comedian openly fought with depression and mental illness for years, and had several well-publicized relationships, including one with singer Ariana Grande.

Staten Islander’s next film role is the The DC Comic movie “The Suicide Squad”, is scheduled to hit theaters on August 6, 2021.

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Millions of borrowers now have credit problems, how can you still serve them? https://guideglobal.com/millions-of-borrowers-now-have-credit-problems-how-can-you-still-serve-them/ https://guideglobal.com/millions-of-borrowers-now-have-credit-problems-how-can-you-still-serve-them/#respond Wed, 07 Apr 2021 23:15:53 +0000 https://guideglobal.com/millions-of-borrowers-now-have-credit-problems-how-can-you-still-serve-them/ Between the third and fourth quarters, the US economy experienced the largest decline in real GDP in history, followed by the largest increase in real GDP in history. Amid the chaos and confusion of these months, the sheer magnitude of this economic earthquake has at times been lost. Although estimates vary, this initial drop equates […]]]>

Between the third and fourth quarters, the US economy experienced the largest decline in real GDP in history, followed by the largest increase in real GDP in history. Amid the chaos and confusion of these months, the sheer magnitude of this economic earthquake has at times been lost. Although estimates vary, this initial drop equates to as much as 40 million jobs lost due to lockdown orders and the rapid spread of COVID-19. Many of those jobs were later clawed back, but sudden and brutal unemployment during a time of national crisis has left millions of Americans with scars on their psyches and blemishes in their credit reports.

Initiators must now work in an economy where credit defaults are much more common than before. The laid-off workers who could have had solid incomes and assets had to resort to credit to get through the tough first months. Borrowers who would have qualified for agency loans before the pandemic, even those who have recovered their income, are excluded by these imperfections. There are different tools that originators have to use to secure loans to these borrowers. The solution may lie in the non-QM.

“It is important to understand the premise of non-quality management as a broader ‘off-branch’ offering, which generally meets the needs of borrowers with credit problems who still have the capacity to repay.” said Tom Hutchens (pictured). , executive vice president of production at Angel Oak Mortgage Solutions. “One of the results of COVID-19 is definitely that more people will have more blemishes, perhaps than ever before. We have gone from a record high unemployment rate to a record high unemployment rate in 60 days. Not everyone is prepared for unemployment so quickly. We believe that non-quality management will be the solution for borrowers directly affected by COVID-19. “

Hutchens pointed out that non-quality management is suitable for borrowers with credit distress who are back on their feet and earning good income again. These borrowers have the means and the capacity to repay the loans, but circumstances and bad luck in the spring of 2020 hurt their credit reports so that they no longer fit in the agency’s box.

While non-QM bank statement loans are often a solid solution for independent borrowers, Hutchens pointed out the use of other non-QM products for W-2 borrowers who were unemployed for a while but are falling behind. have since largely recovered and who wish, like so many other Americans right now, move further away from a city.

While non-QM is often accompanied by a higher rate at which a borrower may hesitate, Hutchens explained that these products are double the amount of “temporary loans,” a way to overcome the cracks exposed by COVID and put back the debt. borrower, buy new property or withdraw cash from their home. A wise originator can explain how these products can help a borrower improve their overall credit situation.

Hutchens also highlighted the importance of manual underwriting in the non-QM process as a key safety measure for finding the right borrowers. Through manual underwriting, Angel Oak can understand the whole story of a borrower, understanding that life takes unexpected turns and allowing a little human forgiveness into the system.

“We’ve always said no-QM is a common sense loan,” Hutchens said. “It’s not just black and white, we work a lot in gray areas. We make credit decisions not only about whether we believe this borrower has the documented ability to repay, but we believe they will repay us. We take into account items such as reduction in loan-to-value ratio, reserves and reasonable debt to income. We put it all together and then make this credit decision based on the individual borrower’s situation. ”

To attend a non-QM information webinar, you can register here.

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Azimut tokenizes its loan portfolio with Sygnum Bank https://guideglobal.com/azimut-tokenizes-its-loan-portfolio-with-sygnum-bank/ https://guideglobal.com/azimut-tokenizes-its-loan-portfolio-with-sygnum-bank/#respond Wed, 07 Apr 2021 23:14:56 +0000 https://guideglobal.com/azimut-tokenizes-its-loan-portfolio-with-sygnum-bank/ Azimut Group, one of the leading independent asset managers in Europe, has partnered with Sygnum Bank to symbolize its first portfolio of loans to Italian small and medium-sized enterprises (SMEs). This 5 million euro portfolio will be followed by other larger portfolios, with tokens issued through Desygnate, Sygnum’s main market issuance platform. This provides a […]]]>

Azimut Group, one of the leading independent asset managers in Europe, has partnered with Sygnum Bank to symbolize its first portfolio of loans to Italian small and medium-sized enterprises (SMEs).

This 5 million euro portfolio will be followed by other larger portfolios, with tokens issued through Desygnate, Sygnum’s main market issuance platform.

This provides a concrete example of how tokenization can help close the US $ 5,000 billion funding gap by providing businesses with an alternative way to raise capital.

Sygnum is currently building a strong portfolio of asset tokens in the venture capital, mid cap, real estate and art and collectibles verticals to create unique investment opportunities for investors. .

Real-world example of how tokenization can help close the $ 5 trillion mid-cap funding gap

Azimut was part of the first cohort of issuers announced at the launch of Sygnum’s bank-grade tokenization solution, Desygnate. In a first phase, Azimut symbolizes a portfolio of 5 million euros of loans to Italian SMEs which will be offered to its private clients and to other Azimut funds for greater portfolio diversification. This will be followed by other larger portfolios.

Obtaining financing is a common challenge for mid-cap companies; traditional financial markets have high costs and extensive rating requirements, while bank loan approvals require rigorous credit assessment. This resulted in a USD 5[1] trillions of dollars in funding gap, and Azimut provides a real-world example of how tokenization can begin to address this problem by providing businesses with an alternative way to raise capital.

“Access to financing is a constraint to the growth of mid-cap companies, and it is a priority for the Synthetic Bank of Azimut (Banca Sintetica)[2] project, which aims to provide 1.2 billion euros of financing to Italian SMEs over the next four years, ”says Giorgio Medda, co-CEO of the Azimut group. “Our partnership with Sygnum in the area of ​​tokenization will allow us to leverage the power of distributed ledger (DLT) technology to increase the efficiency and transparency of synthetic banking,” he adds.

Sygnum’s portfolio of unique investment opportunities continues to grow

Sygnum has continued to welcome new issuers since the launch of its regulated end-to-end tokenization solution in November 2020. The bank continues to create new investment opportunities in its four investment verticals: Venture Capital, Mid Cap , Real Estate and Art & Collectibles, including the Azimut token, allowing investors to take advantage of asset classes previously considered difficult to access in a direct and fractional fashion.

In February of this year, Sygnum and Fine Wine Capital, a Swiss-based fine wine investment company, symbolized a portfolio of investable premium wines that was fully subscribed within four days. This was Sygnum’s first asset token offering in the Art & Collectibles investment sector and under the new Swiss DLT law.

Mathias Imbach, Co-Founder and CEO of Sygnum Bank Group, says: “There is a strong appetite for the investment opportunities that tokenization opens up to investors, which will support the construction of more holistic, diversified and market-ready investment portfolios. ‘to come up. We are proud to work with Azimut, one of the first innovators in this space.

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GreenSky Offers ABS Home Renovation Loan For The First Time https://guideglobal.com/greensky-offers-abs-home-renovation-loan-for-the-first-time/ https://guideglobal.com/greensky-offers-abs-home-renovation-loan-for-the-first-time/#respond Wed, 07 Apr 2021 23:14:56 +0000 https://guideglobal.com/greensky-offers-abs-home-renovation-loan-for-the-first-time/ Home improvement loans issued through point-of-sale finance specialist GreenSky entered the asset-backed market in an initial securitization of $ 261.8 million. According to market data, sponsor Waterfall Asset Management marketed bonds in three tranches, which were backed by stakes in a pool of blue chip unsecured consumer loans that are primarily used to fund major […]]]>

Home improvement loans issued through point-of-sale finance specialist GreenSky entered the asset-backed market in an initial securitization of $ 261.8 million.

According to market data, sponsor Waterfall Asset Management marketed bonds in three tranches, which were backed by stakes in a pool of blue chip unsecured consumer loans that are primarily used to fund major upgrades. door / window and HVAC systems.

Cascade, including founders were pioneers of securitized assets in the 1980s, bringing together assets that primarily originated from Synovus Bank and Midland States Bank in partnership with GreenSky to underwrite indirect loans from 16,000 home improvement retailers across the country, including The Home Depot and Renewal by Anderson.

While GreenSky (Nasdaq: GSKY) provides loans on its platform, it was not involved in structuring the 2021-GRN1 Cascade Funding Mortgage Trust deal or selling the tickets, according to a Kroll report. Bond Rating Agency.

“The quality of the receivables, the performance data going back to 2014, the transaction structure and the operating history of the company justified the double-A minus rating despite the first time GreenSky entered the ABS market,” said Eric Neglia , Chief Executive Officer of Kroll, pointing out that the deal is also adequately secured and benefits from an excess spread as well as a reserve fund.

Alberto Masnovo / Alberto Masnovo – stock.adobe.com

While this is not a green bond deal, there is a climatic angle that may be appealing to ESG-prone bond investors: around 62% of the trust’s loans are for replacement. windows / doors or HVAC. Demonstrating their importance to the climate, these energy-saving type retrofit spending is an important part of green energy plans in many states.

The loan pool includes 27,607 loans for home improvement products and services, with an average balance of $ 10,341 and a weighted average coupon of 7.97%. The loans, with an average initial term of 113 months, are seasoned an average of 15 months, according to Kroll. The average FICO borrower is 749.

The $ 226.5 million Class A tranche, which has a 1.1% coupon, benefits from a 21.1% credit enhancement consisting of overcollateralisation, Class B and C subordination, reserve fund of 0.5% and a surplus gap.

Atlanta-based GreenSky, which raised nearly $ 1 billion in an IPO in 2018, is a small player in the massive consumer loan market and uses a funding model from third-party banking partners. Georgia-based company Synovus, which funded more than 75% of the trust’s loans, is GreenSky’s largest banking partner by far. But GreenSky has agreements with other banks to ensure depth of financing capacity, with current total commitments of $ 8.1 billion.

In addition to its banking partners, the company has a $ 555 million revolving asset-backed credit facility, administered by JPMorgan, to fund loan equity purchases from the GreenSky platform. (GreenSky sells the interest directly to WaterFall, according to Kroll)

Most of GreenSky’s income comes from the initial transaction fees charged to merchants. In addition, GreenSky charges management fees on the loan portfolios they serve.

While the new ABS deal is all about home improvement loans, the company recently announced that it will start working with healthcare providers to help patients fund their medical expenses. Late last year, GreenSky unveiled a $ 1.8 billion, 3-year commitment – up to $ 600 million per year – from a new banking partner to support the care lending activities of health.

A tiny 0.26% of the trust’s loans are currently in arrears between 30 and 59 days, but GreenSky has amended its loan agreements to allow forbearance amid COVID economic tensions.

GreenSky offers low rate, deferred interest rate and zero rate loans on its platform. The majority of low rate loans have a “buy window,” a period during which the borrower can withdraw the loan funds. These loans usually start with an interest-only period of five or six months and then become a simple interest loan. Low rate loans typically have interest rates ranging from 2.99% to 11.99% for the life of the loan.

Kroll’s review of GreenSky’s historic credit loss on its low rate loans dates back to 2014. Unsurprisingly, the loss experience is closely tied to FICO scores. By December, around 1.4% of the pool’s current capital balance had already been overdue at one point or another. About 0.26% of the pool is currently in the delinquency stage, with an equal percentage of loans enrolled in a hardship program.

Kroll’s baseline loss range expectations are 6.8% to 8.8%.

Kroll noted that GreenSky has been advised that the Consumer Financial Protection Bureau intends to take enforcement action against the lender for its policies, procedures and processes, unless a settlement is reached first.

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BBVA sells home loan and portfolio of assets to Unnim https://guideglobal.com/bbva-sells-home-loan-and-portfolio-of-assets-to-unnim/ https://guideglobal.com/bbva-sells-home-loan-and-portfolio-of-assets-to-unnim/#respond Wed, 07 Apr 2021 23:14:56 +0000 https://guideglobal.com/bbva-sells-home-loan-and-portfolio-of-assets-to-unnim/ BBVA has entered into an agreement with a global investment fund company KKR (mainly through its KKR Private Credit Opportunities Partners III fund) to transfer the ownership of a portfolio of loans and real estate assets (called “Dakar”), with a gross value of around 700 million euros. The portfolio consists of two types of real […]]]>

BBVA has entered into an agreement with a global investment fund company KKR (mainly through its KKR Private Credit Opportunities Partners III fund) to transfer the ownership of a portfolio of loans and real estate assets (called “Dakar”), with a gross value of around 700 million euros. The portfolio consists of two types of real estate loans (with and without mortgage guarantees) and REO (Real Estate Owned) assets.

Over the past three years, BBVA has carried out several loan portfolio sales operations, mainly real estate and mortgage loans. In December 2019, BBVA completed its two largest sales of written off loan portfolios: The sale of a portfolio with a gross value of approximately 2.5 billion euros (“ Juno ” portfolio) and the transfer of a portfolio consisting of loans to small and medium-sized enterprises (SMEs) from a gross value of approximately 2.1 billion euros (‘Hera Portfolio).

In December 2018 the bank finalized the sale of a portfolio of 1.2 billion euros (called ‘Ánfora‘) consisting mainly of mortgage loans (both non-performing and in default). In June 2018, BBVA has sold a portfolio of real estate development loans worth € 1 billion – called ‘Sintra‘- and in July 2017, it sold another portfolio of developer loans with a gross value of around 600 million euros, known as’Jaipur“.

In addition, in October 2018, following an announcement in November 2017, BBVA completed the transfer of its real estate activity in Spain to Cerberus Capital Management. The closing of the transaction resulted in the sale to Cerberus of an 80% stake in Divarian, the company created to transfer the real estate portfolio. BBVA kept the remaining 20%.

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KBRA assigns marks to CSAIL 2021-C20 https://guideglobal.com/kbra-assigns-marks-to-csail-2021-c20/ https://guideglobal.com/kbra-assigns-marks-to-csail-2021-c20/#respond Wed, 07 Apr 2021 23:14:56 +0000 https://guideglobal.com/kbra-assigns-marks-to-csail-2021-c20/ NEW YORK–(BUSINESS WIRE) – Kroll Bond Rating Agency (KBRA) is pleased to announce the awarding of ratings to 14 classes of CSAIL 2021-C20, a $ 650.1 million CMBS conduit transaction secured by 28 commercial mortgages secured by 40 properties. The collateral properties are located in 21 MSAs, of which the three largest are New York […]]]>

NEW YORK–() – Kroll Bond Rating Agency (KBRA) is pleased to announce the awarding of ratings to 14 classes of CSAIL 2021-C20, a $ 650.1 million CMBS conduit transaction secured by 28 commercial mortgages secured by 40 properties.

The collateral properties are located in 21 MSAs, of which the three largest are New York (19.5%), Los Angeles (12.8%) and Atlanta (12.8%). The pool is exposed to all major types of properties, with three types accounting for over 15.0% of the pool’s balance: multi-family (26.0%), commerce (24.3%) and office (23.3%). The loans have principal balances ranging from $ 3.3 million to $ 60.0 million for the pool’s largest loan, The Grace Building (9.2%), which is secured by a LEED-certified office tower 1.6 Million Square Foot Class A Gold Located in Midtown. Manhattan borough neighborhood in New York. The top five loans, which also include Miami Design District (9.2%), 888 Figueroa (6.2%), MGM Grand & Mandalay Bay (6.0%) and The Westchester (5.4%), represent 36.0% of the initial pool balance, while the top 10 loans represent 60.0%.

KBRA’s analysis of the transaction incorporated our multi-borrower rating process which begins with our analysts’ assessment of the financial and operational performance of the underlying collateral properties, which determines KBRA’s estimate of the cash flow. sustainable net cash flow (KNCF) and KBRA value using our United States CMBS Property Assessment Methodology. On an aggregate basis, the KNCF was 10.9% lower than the issuer’s cash flow. KBRA cap rates were applied to the KNCF of each asset to derive values ​​that were, on an aggregate basis, 44.7% lower than third party valuation values. The pool has a KLTV trust of 101.9% and an all-in KLTV of 110.3%. The model deploys rent and occupancy constraints, probability of default regressions, and loss-given-default calculations to determine the losses for each collateral loan which are then used to assign our credit scores.

Click on here to view the report. To access the relevant notes and documents, click on here.

Related publications

Disclosures

Further information on key credit considerations, sensitivity analyzes that take into account factors that may affect these credit ratings and how they might lead to an upgrade or downgrade ESG factors (where they are a key driver of change in credit rating or rating outlook) can be found in the comprehensive rating report mentioned above.

A description of all substantially significant sources that were used in preparing the credit rating and information on the methodology (s) (including significant models and sensitivity analyzes of key relevant rating assumptions, where applicable applicable) used to determine the credit rating are available in the information disclosure form (s) located here.

Information on the meaning of each rating category can be found here.

Additional information relating to this rating action is available in the Information Disclosure Form (s) mentioned above. Additional information regarding KBRA policies, methodologies, rating scales and information is available at: www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the United States Securities and Exchange Commission as NRSRO. Kroll Bond Rating Agency Europe Limited is registered as CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as CRA with the UK Financial Conduct Authority under the temporary registration regime. In addition, KBRA is designated as a designated rating agency by the Ontario Securities Commission for issuers of asset-backed securities to file a simplified prospectus or a shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a credit rating provider.

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In brief: guarantees and collateral for the financing of acquisitions in Japan https://guideglobal.com/in-brief-guarantees-and-collateral-for-the-financing-of-acquisitions-in-japan/ https://guideglobal.com/in-brief-guarantees-and-collateral-for-the-financing-of-acquisitions-in-japan/#respond Wed, 07 Apr 2021 23:14:56 +0000 https://guideglobal.com/in-brief-guarantees-and-collateral-for-the-financing-of-acquisitions-in-japan/ Guarantees and collateral Linked company guarantees Are there any restrictions on providing related corporate guarantees? Are there any limits on the ability of affiliated companies registered abroad to provide guarantees? While there are no financial aid rules in Japan that would lead to restrictions on a related company’s ability to provide collateral, the corporate benefit […]]]>

Guarantees and collateral

Linked company guarantees

Are there any restrictions on providing related corporate guarantees? Are there any limits on the ability of affiliated companies registered abroad to provide guarantees?

While there are no financial aid rules in Japan that would lead to restrictions on a related company’s ability to provide collateral, the corporate benefit is an issue. The concept of corporate advantage in Japan relates to the “duty of care” and “duty of loyalty” of directors. Directors are required to act for the benefit of the company. Since the ultimate beneficiaries of the company are its shareholders, it is generally understood that any action which does not harm the interests of the shareholders will not violate the duties of diligence and loyalty.

On this basis, guarantees (guaranteed or not) provided by related companies having a common 100% ultimate shareholder are generally not limited by social benefits.

However, where there are minority shareholders, the social benefit can complicate any analysis to determine whether related corporate guarantees can be provided.

There is no restriction under Japanese law on the ability of related companies registered abroad to provide guarantees, whether guaranteed or not.

Target assistance

Are there specific restrictions on the target providing guarantees, sureties or financial assistance in connection with an acquisition of its shares? What steps can be taken to enable such actions?

Under Japanese law, there is no equivalent legal restriction on financial assistance or the provision of corporate guarantees in connection with the acquisition of shares per se. However, questions relating to employee benefits (ie whether directors have properly fulfilled their duty of care and duty of loyalty in their decisions to provide guarantees) also apply to a target guarantee.

Types of security

What types of security are available? Are fixed and floating charges allowed? Can a general lien be granted on all the assets of a business? What are the typical exceptions to an all-asset grant?

Japanese law does not provide for a general form of security over all assets similar to a floating charge or general lien. Subject to certain limited exceptions (which are generally not relevant in the context of an acquisition financing transaction), the guarantee in Japan must be granted on an asset-by-asset basis.

In the context of an acquisition financing transaction in Japan, the security package generally covers all the assets of the target group and the acquirer, as well as all the shares issued by the target group and the acquirer. However, it is common in Japan that the transfer or other assignment of trade receivables and certain other contractual rights (for example, rental deposits) are contractually prohibited. In such circumstances, these assets are generally excluded from any security package.

Requirements for perfecting a security

Are there specific laws governing the perfection of certain types of guarantees? What types of notice or other action must be taken to put a security interest in default?

The method of refining collateral differs depending on the type of collateral granted and the type of asset provided as collateral.

Actions

Under the Companies Act, an unlisted company may, in its articles of association, choose whether or not to issue physical share certificates.

In the case of a company issuing share certificates, a pledge is constituted by an agreement between the parties and the physical delivery of the share certificates to the pledgee. The pledge of shares is made perfect by the continued possession by the pledgee of the share certificates.

In the case of a company not issuing share certificates, a pledge is established by agreement between the parties and formalized by entry in the register of shareholders kept by the issuing company. Lenders generally require the issuance of share certificates when establishing collateral on shares to ensure their control over any subsequent trading in the shares.

When transactions relate to dematerialized shares of a listed company, transfers of these shares are made through a book-entry system managed by the Japan Securities Depository Center (JASDEC). A pledge on dematerialized shares is created by an agreement between the parties, and the transfer of the shares to the pledge sub-account of the pledgee held with a participant in the JASDEC system.

Receivables

The security on the receivables can be constituted by a pledge or an assignment of security. Essentially, a pledge is typically used to take collateral on receivables (eg, bank deposits, insurance products, and intercompany loans); however, an assignment of collateral is commonly used to take security on trade receivables.

There are three options for completing a pledge or assignment of collateral on receivables:

  • certified notice by date to the underlying debtor (usually delivered by certified mail);
  • obtaining certified consent by date of the underlying debtor (date on which the certification is carried out by a notary); or
  • registration of pledge or assignment at the Office of Legal Affairs.

Of these options, certified consent by date is typically used (including for bank deposits, insurance products, and business-to-business loans), while registration is more commonly used for trade receivables, especially when there is a large number of underlying obligors or securities providers. does not want the underlying obligors to be aware of such assignment of collateral (mainly from a business point of view). Note, however, that the registration of an assignment only improves the assignment vis-à-vis third parties. Registration does not perfect the assignment against the underlying debtors and notice to the underlying debtors will always be required to complete the assignment against those debtors.

Movable property

A security assignment for movable property is established by agreement between the parties and accomplished either by handing over the movable property to the secured creditor or by registering the security assignment at the Office of Legal Affairs. Physical delivery of assets is not required if the parties agree that the collateral provider has delivered the underlying assets but holds them on behalf of the secured parties. This form of delivery is called “constructive delivery”.

Immovable

A mortgage on real estate is established by agreement between the parties and, to be perfect, must be registered with the local legal affairs office in which the relevant property is located. The application for registration is made by both parties to the mortgage, usually through a qualified magistrate acting on behalf of both parties. A registration fee of 0.4 percent of the covered bonds (i.e. the principal amount of the loan) is imposed upon initial registration and a nominal fee will apply to any subsequent registrations securing the same. obligations.

Intellectual property

Registration with the Patent Office is required for the establishment of a pledge on trademarks and patents. A copyright pledge is established by agreement between the parties and, to be perfect, must be registered with the Cultural Affairs Agency or designated registration body.

Renew a security

Once a security is acquired, are there renewal procedures to keep the lien valid and registered?

In Japan, it is not necessary to renew the perfection of most security interests to maintain its effect. An exception to this basic rule concerns the registration of an assignment of collateral (or pledge) of receivables and movable property, which is likely to expire after 10 years for movable property and receivables against unspecified debtors and 50 years for claims on specific debtors). In this case, an extension of the underlying record will be necessary.

Consent of stakeholders for guarantees

Is there a “works council” or other similar consents required to approve the provision of guarantees or surety by a company?

There are no such requirements under Japanese law.

Grant a guarantee through an agent

Can collateral be given to one agent for the benefit of all lenders or must collateral be given to lenders individually and then changes must be executed on an assignment?

The basic principle of Japanese law is that collateral must be given to all lenders individually and that an agent cannot hold collateral on behalf of or for the benefit of all lenders. If a secured lender assigns all or part of its rights in a secured loan to a third party, the security will be automatically or contractually (depending on the nature of the security) assigned to the assignee, and the perfection of this security assignment the interest will have to be completed.

An alternative structure is a security trust, where an authorized trustee holds the security in trust for the benefit of each lender.

In such a case, each secured party will obtain a beneficial interest in the trust (TCC) representing its interest in the assets of the security trust. When a lender assigns its loan to a third party, the assignor will also assign its related TCC to the assignee, without disturbing the collateral, which remains held by the security trustee. While there have been a number of acquisition finance transactions in Japan where a security trust has indeed been used (particularly in large transactions where active negotiation of the secured loan in the secondary market was expected), it is still not commonly used in practice due to the expense. and the time required due to the involvement of an approved third party trustee. Another alternative structure is parallel debt, where a borrower owes the same debt to both a collateral agent and to the collateralized parties in parallel, and the security agent holds collateral to secure that parallel debt owed to him by the borrower. To date, parallel debt structures have not been used in Japan despite strong arguments supporting their theoretical possibility. However, due to recent changes, the amended Civil Code now recognizes, among other things, that joint and several claims can be created by agreement between the parties. This change could favor the use of parallel debt structures in the future.

Protection against creditors before release of collateral

What protection is usually afforded to creditors before the collateral can be released? Are there ways to structure around such protection?

In Japan, no legal protection is given to creditors before the collateral can be released.

Fraudulent transfer

Describe the fraudulent transfer laws in your jurisdiction.

Under the Civil Code, a creditor can ask (within certain time limits) a court to set aside a fraudulent act committed by a debtor who knew that such an action would harm the creditor, unless anyone who has benefited from a such act, or any person having succeeded in this benefit, was a third party in good faith at the time of the act or the succession to this benefit and would be harmed by such cancellation. Such a fraudulent act may include the constitution of a security right over the assets of a target company or its subsidiaries when such persons are in financial difficulty.

Date declared by law

Correct on:

Please indicate the date on which the law stated here is correct.

February 4, 2021

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