Scandinavian Credit Fund I AB (publ) reports a NAV rate for May of NAV 64.85, a decrease of 3.5%. The month's NAV change is partly derived from a strengthened Swedish krona where the USD loses approx. -4% (USD/SEK) and increased provisions in accordance with the IFRS9 model where a holding is moved from category 2 to category 3, which increased the provision by approx. SEK 22 million. The total reservation is approx. 36,54% of NAV.
| Category | SEK | % of NAV |
| Category 1 | 11 382 819,00 | 0,65% |
| Category 2 | 16 167 152,00 | 0,92% |
| Category 3 | 613 083 133,00 | 34,97% |
| Total IFRS9 | 640 633 104,45 | 36,54% |
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 May, the fund made two payments of 4 MDKK and 1.5 MDKK to "14 04 2024 A/S" (formerly b.energy) under a signed Letter of Intent (LOI) dated 14 July 2023. The payment to the company was made in a strategic purpose and on the advice of local corporate lawyers in Denmark.
Currency exposure
The fund has previously currency hedged all holdings with exposure to currencies 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.
The chart shows the portfolio's currency exposure expressed in %
During May, the Swedish krona strengthened against the majority of the fund's currencies, which reduced the value of the portfolio assets in currencies other than SEK. The table below shows the percentage change in each currency from the NAV time in April and the NAV time in May.
| Currency | 2024-05-31 | 2024-04-31 | % change |
| DKK/SEK | 1,5311 | 1,5767 | -2,89 % |
| EUR/SEK | 11,4194 | 11,7607 | -2,90 % |
| GBP/SEK | 13,4121 | 13,7699 | -2,60 % |
| NOK/SEK | 1,0028 | 0,992 | 1,09 % |
| USD/SEK | 10,5244 | 11,0196 | -4,49 % |
The table shows changes in the respective exchange rates between April and May.
Cash & liquid assets
In previous monthly comments, the fund has communicated a cash percentage of the fund's total NAV. The percentage that has been communicated in recent months has been between 6.5% to 6.2%. The share of cash is calculated on the Fund's total cash in all currencies through the Fund's total AuM (Asset Under Management). This percentage is unfortunately incorrectly reported in previous monthly comments. At March's NAV, the fund's total share amounted to approx. 4.64% and for April's NAV to approx. 4.32%. In the month of May, the treasury amounted to a 3.87%, which is a decrease of about 0.45% or about SEK 7.8 million.
| Currency | % distribution |
| DKK | 0,01% |
| EUR | 7,98% |
| GBP | 0,00% |
| ENOUGH | 0,01% |
| SEK | 91,95% |
| USD | 0,06% |
The table shows the Fund's respective currency in relation to the Fund's total cash assets and in percentage
Pledged assets
Blue Energy is being liquidated. The customer base, the brand and the intangible assets were sold during April in a collection transaction. A "pick-up deal" is a form of business acquisition where the buyer only buys the assets and possibly the liabilities of a company, but not the corporate structure itself or the legal entity. The assets included in a collection deal can include things like inventory, machinery, intellectual property rights (such as trademarks and patents), customer records, and ongoing contracts. Name change has consequently taken place to 14 04 2024 A/S.
Remaining assets are being sold.
The rent levels in the properties in Norrtälje and Hallstavik have been raised. The rental rate has increased during the spring in Hallstavik. During Q2, the Fund has carried out major work in reviewing agreements and leases where the Fund has received the properties' net operating income. The market situation for the property industry has previously been affected by the high interest rates. However, the fund takes a positive view of the interest rate market's recent reduction and the ECB's announcement of an interest rate cut.
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 cabins takes place via Idetfjallby | Mountain cabins in Björnrike/Vemdalen.
The rental takes place via Skistar at https://www.skistar.com/sv/boka-online/boende/vemdalen/bjornrike/nipan/mosippevagen-3a-vfm03a/#images
Read more athttps://idetfjallby.se/
Development of the loan portfolio
In the work with the plots in Bergen and Oslo, the fund took in external valuations on the mortgaged land, which was reflected in the previous hub (March) through increased reserves. The fund works actively and through local legal representatives to recover the largest possible share of outstanding loans.
The distribution of the portfolio
The distribution of the portfolio regarding the mortgaged assets looks according to the table below. The rest of the portfolio is loans that have not been pledged and which run according to the agreement and with due date.
It is important to point out that the pledged assets consist of companies in category 1-3, i.e. category 1 are companies that pay their interest and amortization according to agreement, which includes the largest holdings in the portfolio.
Management strategygive
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 in 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, inflation, and a general geopolitical situation in the immediate area. 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 borrowers, the fund may act through legal representation. The fund's goal is always to ensure a positioning for maximum payment 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 cannot currently communicate any forecast regarding when the next payment may take place and recommends all investors to take part/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 enough cash for the repayment to be meaningful. This is because the repayments are associated with administrative work and costs.
The record date for repayments will henceforth take place on the same day as the monthly NAV, i.e. the last day of the month and published on the first working day of the month. The refund is made five working days later.
Repayment of profit shares is paid pro rata to the Fund's shareholders.
More information and Q&A is available on the Fund's website:https://kreditfonden.se/
