Core Insights - Funding Circle, the UK's leading SME finance platform, has announced a significant transaction with Waterfall Asset Management and Citi, aimed at enhancing its funding capabilities for small businesses [1][3] Funding Agreement Details - The agreement includes a £700 million forward flow commitment from Waterfall over two years, along with senior financing from Citi and the purchase of an existing loan portfolio valued at approximately £120 million [2] - This transition from balance sheet to institutional funding is part of Funding Circle's strategy to test new propositions before scaling them with partners [2] Partnership Significance - The transaction highlights the long-term partnership between Funding Circle and Waterfall, which began in 2018, with Waterfall surpassing £3 billion in total lending through Funding Circle's platform [3] - This deal strengthens Funding Circle's position as a platform lender and enhances its capacity to meet the increasing demand for SME credit [3] Executive Statements - Dipesh Mehta, Chief Capital Officer at Funding Circle, emphasized that expanding partnerships reflects confidence in their credit underwriting and capital markets expertise [4] - James Cuby, Head of Europe at Waterfall, expressed satisfaction in deepening the relationship with Funding Circle and confidence in its technology and credit assessment capabilities [4] - Sebastian Walf, Managing Director at Citi, stated that Citi is pleased to support the funding agreement through senior financing [4] Company Overview - Funding Circle has provided approximately £17 billion in credit to over 125,000 businesses in the UK since its establishment in 2010 [5] - The platform offers a unique customer experience for SME borrowers through technology and data, while providing institutional investors access to an alternative asset class with attractive returns [6]

Core Insights - Tricolor Holdings, a subprime auto lender focusing on undocumented immigrants, has filed for bankruptcy liquidation, prompting a scramble among creditors to claim remaining assets [2][3][17] Group 1: Bankruptcy and Liquidation - Tricolor's bankruptcy filing has led to a rush among creditors to secure their claims on the company's assets, with banks and investment firms actively assessing their collateral [3][4] - The company opted for liquidation instead of reorganization due to concerns over litigation risks and insufficient assets for restructuring, listing over 25,000 creditors in its filing [17] Group 2: Creditor Actions and Concerns - Triumph Financial Inc. is actively retrieving vehicles believed to be collateral for their loans, while Clear Haven Capital Management is urging bondholders to unite against larger banks to protect their interests [4][10] - Fifth Third Bank anticipates an impairment charge of up to $200 million, with other banks like JPMorgan and Barclays facing similar exposures [7][10] Group 3: Fraud Investigations and Asset Integrity - Federal investigators are probing potential fraud related to Tricolor's operations, with indications that collateral may have been pledged to multiple lenders and that key loan documentation may have been compromised [5][14] - Concerns are rising that bond investors may not have the usual protections in asset-backed deals if the collateral is not sound and documentation is flawed [8][14] Group 4: Market Impact and Securities - The prices of Tricolor's asset-backed securities, totaling $217 million issued in June, have plummeted, with some lower-ranking tranches now valued at as little as 12 cents on the dollar [7][8] - Bondholders have reported missed payments and lack of remittance reports, raising alarms about the integrity of the asset-backed securities [12][13] Group 5: Legal and Financial Implications - The bankruptcy process is expected to be costly, with potential legal and advisory fees diminishing the recoverable value for creditors [16] - The situation mirrors past bankruptcies in the subprime auto lending sector, where junior bondholders faced significant losses [16]

Core Viewpoint - Waterfall Asset Management has appointed Keerthi Raghavan as Co-Chief Investment Officer, enhancing its leadership team to oversee investment activities [1][2] Company Overview - Waterfall Asset Management is an alternative investment manager focused on specialty finance opportunities within asset-backed credit, whole loans, and real assets [4] - The firm was founded in 2005 and employs a relative value approach for sourcing and investing across 60+ sectors in the asset-based finance arena [4] - As of December 31, 2024, Waterfall managed approximately $12.5 billion in assets [4] Leadership Changes - Keerthi Raghavan, who joined Waterfall in 2014, has been promoted to Co-CIO alongside Brian Rebello [1][2] - Patrick Lo, the current Co-CIO, is resigning after 19 years with the firm, and his contributions have been acknowledged by the firm's founders [2] - Keerthi Raghavan has over 16 years of industry experience and previously held a director position at Barclays Capital [2] Key Personnel - Brian Rebello, the other Co-CIO, has over 25 years of industry experience and joined Waterfall in 2010 [3] - Both Co-CIOs hold advanced degrees and have significant backgrounds in finance and investment management [3]