Scandinavian Credit Fund I AB (publ) reports a NAV rate for June of NAV 64.79, a decrease of -0.09%. The NAV price represents a total change of -36,38% since closing, of which -10% of the total change is the fund's first repayment to unit owners. The net change, regardless of the refund, thus adds up to -26.38% since closing.
The month's NAV change is derived from a marginal reduction in provisions in accordance with the IFRS9 model and a strengthened Swedish krona. The reservation in category 1 and 2 has increased slightly, while category 3 has decreased in reservation, which gives a net effect of approx. SEK 329,000. The total reservation is approx. 36,57% of NAV.
| Category | SEK | % of NAV |
| Category 1 | 5,876,705 | 0,34% |
| Category 2 | 15,044,090 | 0,86% |
| Category 3 | 619 383 237 | 35,37% |
| Total IFRS9 | 640 633 104,45 | 36,37% |
The table shows the proportion of reserved funds in accordance with the IFRS9 regulations. The management is model-based and applicable to all loans in the portfolio.
Ongoing Administration
During the month of June, the fund did not carry out any additional lifting. "14 04 2024 A/S" (formerly b.energy) is officially declared bankrupt, which was carried out via Danish lawyers and representatives. The fund works actively with all portfolio holdings with the goal of maximizing the recovered value for repayment to unit owners pro-rata.
For educational and communication purposes, the Fund has produced material to develop the liquidation process, terminology and the Fund's plan going forward. The material is published in connection with this monthly newsletter and can be downloaded from the fund's website www.kreditfonden.se
Currency exposure
The fund has previously currency-hedged all holdings with exposure to a currency other than SEK. Currency hedging (Currency Hedge) means that the fund sold the corresponding nominal value in the currency in which the loan was paid out. As a result of a currency hedge (all things being equal), movements in the currency have a very limited effect on the portfolio's NAV. The sale of the currency is generally made against major credit institutions and under the agreement "ISDA" (International Swaps & Derivatives Association) and through a futures contract (derivative). As previously, the fund has been informed that it has ceased to hedge the portfolio, which in practice means that all holdings in currencies other than SEK may both increase and decrease in value over time and thus fully correlated with the respective currency's movements. Volatility in the fund's NAV is therefore likely to increase somewhat in the future and depending on the development of the Swedish krona against the respective currency. As of June, the fund has NAV assets in SEK, USD, NOK, EUR, GBP and DKK and where the fund's primary exposure is reported in the pie chart as a percentage (%) of the fund's total assets, excluding cash.
During June, the Swedish krona strengthened against the majority of the fund's currencies, with the exception of the USD. The table below reports the percentage change in each currency from the NAV time in May and the NAV time in June.
| Currency | 2024-06-30 | 2024-05-31 | % change |
| DKK/SEK | 1,522 | 1,531 | -0,59% |
| EUR/SEK | 11,350 | 11,419 | -0,60% |
| GBP/SEK | 13,395 | 13,412 | -0,12% |
| NOK/SEK | 0,992 | 1,002 | -1,02% |
| USD/SEK | 10,597 | 10,524 | 0,69% |
The table shows the change in the respective exchange rate between the month's NAV and the previous NAV.
Cash & liquid assets
The fund's cash expressed as a percentage (%) at June's NAV amounted to approx. 4.27%, which is an increase of approx. 0.40% compared to the previous month's percentage share of approx. 3.87%. The number of liquid assets is limited during the month. The fund works actively with existing borrowers to advance repayment. Borrowers in the fund are also exploring the possibility of refinancing as a result of the fund's liquidation and to free up additional capital for repayment.
| Cash/Currency | % distribution |
| DKK | 0,005% |
| EUR | 6,325 % |
| GBP | 0,000% |
| ENOUGH | 0,009% |
| SEK | 93,61% |
| USD | 0,05% |
The table shows the Fund's respective currency in relation to the Fund's total cash assets and in percentage
Pledged assets
Blue Energy "14 04 2024 A/S" has been officially declared bankrupt, which has been handled by local legal counsel. The remaining portfolio assets are managed on an ongoing basis where the market situation has strengthened somewhat and is expected to have a positive impact on the companies. The possibility of selling the mortgaged properties also increases slightly as the Riksbank, potentially, adjusts interest rates down over time. As previously communicated, rent levels have increased and indexed and the occupancy rate has increased, which together improve the properties' net operating income and yield. The fund generally sees an improved trend and increased profitability in the fund's pledged assets as the market situation improves somewhat.
The fund works continuously with the sale of cottage properties in Björnrike. To increase interest in the area and the cabins, a couple of these are rented out via Skistar. The fund will evaluate the rental income to assess whether more cabins should be equipped for rental.
The sale of the cottages takes place via Idetfjällby | Mountain cabins in Björnrike/Vemdalen.
For more information about the rental, visit Björnrike / Vemdalen (Skistar.com)
Read more about the cottage properties at idetfjallby.se/
Development of the loan portfolio
The fund works actively and in some cases through local legal representatives to recover the largest possible share of outstanding loans. During the month, the fund has been in constructive dialogues with the majority of existing borrowers with the aim of advancing amortization by, for example, refinancing via third parties of the fund's existing loans. The process is ongoing, but amortizations are estimated to be received during Q3 and Q4 2024. As the amortizations are received by the fund in its entirety, this will be repaid to the unit owners pro-rata. Time for repayment is communicated through newsletters and/or monthly communications.
Management and liquidation strategy
The fund works actively with remaining loans and the liquidation of the portfolio's mortgaged assets. The fund has previously communicated the maturity structure and with the final maturity Q3 2026. However, a divestment of pledged assets is dependent on several factors where the assets, all things being equal, are divested through a sale to another interested party. The value of the asset is thus governed by both micro and macroeconomic factors, i.e. interest rate, inflation, and a general geopolitical situation. The fund's goal is to maximize the value in the event of a sale for repayment to the investors, which means that the liquidation of each asset may run longer than the last loan maturity in Q3 2026.
In the event of a dispute with the borrower, the fund may act through legal representation. The fund's goal is always to ensure a positioning for maximum recovery of the fund's claim, alternatively ensuring the fund's positioning within the pledged company structure.
Refund
The fund regularly receives questions from profit share owners regarding the frequency of repayment of the profit shares. The fund initially communicated an ambition for quarterly payments, which has not been fulfilled. The fund generally does not communicate any forecast regarding when in time the next payment may take place and therefore recommends all investors to take part in/subscribe to the fund's newsletter for ongoing information, read monthly comments and 'questions and answers' on the fund's website.
In the case of repayments, this is paid via Euroclear as repayment of profit share loans and is not to be confused with "disbursement" or "dividend". No withholding tax is therefore deducted. Taxation of the shares is done according to current taxation rules, depending on which form of savings was used. The fund cannot answer questions regarding taxation as the fund does not have insight into individual investors' savings, but it is a matter between the investor and its advisers and custodian institutions.
Repayment takes place when the fund has accumulated a significant volume of cash. This is because the repayments are associated with administrative work and costs which are borne by the fund. The fund's first repayment amounted to approximately 10% of the fund's NAV at the time of repayment.
The record date for repayments will in future take place in connection with the publication of the monthly NAV, which is the last day of each month and is published on the first working day of the month. The repayment is effected five working days after NAV publication and is paid pro rata to the Fund's shareholders.
More information and Q&A is available here on the Fund's website.
