Fortunafi Series 1 Update

[FortunaFi]

Hello Everyone,

Since completing the onboarding of the the pool’s second Asset Originator (“AO”), we have deployed approximately $1.8 million into new assets. The pool has benefitted from this increasing exposure, both in terms of liquidity and diversification. The capital deployed so far has gone into assets with a shorter average life of under 5 months, improving the liquidity profile of the pool. Furthermore, capital has been deployed across eleven (11) new underlying counterparties so far, enhancing diversification of the pool.

Due to the growing exposure to the new AO, the average financing fee of the pool has changed from 14% to the current 12.6%. At target exposures, we expect this average fee to be closer to 9.5-10%. As a result, the current discount rate of 13.25% being used by the smart contracts does not properly reflect the value of TIN. Therefore, we are updating the discount rate used by the smart contracts to a more appropriate 9%. We have consent from TIN holders to proceed with the adjustment and are working with Centrifuge to implement. This update will not impact the value of DROP.

Best,
Fortunafi Team

[sirj]

Hi @FortunaFi, appreciate the update and very happy to hear about shorter duration assets, especially in this uncertain environment it reduces the stress time on the pool.

I agree a discount rate of 13.25% is too high at this point. From my math a Discount Rate of 9.75% would be more appropriate based on current asset financed but, with that said, if financing fees were to continue coming down over the next 3 months a discount rate at a minimum of 9% makes sense to me.

Since you own a majority of the TIN and the TIN would be taking the only impact here, I think it is safe to make this change.

[sirj]

@FortunaFi this change has been implemented.