Frequently asked questions about redemption, covid-19 and expected return

In the spring of 2020, a press release was published by Scandinavian Credit Fund I that the fund, to act in the best interests of all investors, decided to postpone meeting a notification of early redemption of the equivalent of SEK 780 million. Payments should instead be distributed and implemented on a continuous basis as the fund receives liquidity from overdue loans. The fund also communicated that the expected return is lowered from an annual net return of 6–8 percent to 3–5 percent for 2020. This is in the light of covid-19.

The above has created a number of recurring questions with our customers. To gather these in one place and to ensure that all questions are answered based on the information we have today, you will find below a "questions and answers" sorted by subject area.

Should you have any further questions that you feel are not answered, please contact us at, we will update the page.

We would like to emphasize that the Fund formally NOT is closed. The fact that early redemption cannot be met for the month of May has to do with the fact that the fund needs time to get repayments from outstanding loans. As for the reduced expected return for 2020, it is based on a precautionary principle and has NOT to do with the fact that we have information about credit losses that have not been communicated before. Provisions for loan losses are made on an ongoing basis in accordance with the accounting standard IFRS 9. All known information is reflected in the latest NAV.

There is also a functioning secondary market for the fund. However, we do not recommend our investors to sell their shares here, as this may result in the shares being sold at an unfavorable valuation.

common questions

How much is paid in September?

In September, the fund will pay out all remaining Redemption requests from June, July and August. The fund thus no longer has a pro rata queue!

How much is paid in August?

We will redeem approximately SEK 330 million in August, which means that the entire redemption for April and May has been redeemed and 65% by June.

How much is paid in July?

Now in July we do not pay anything in redemption for SCF I, but we expect a larger amount in August.

How much will be paid in June?

On the redemption request of about 800 million received as of April 8, we have already previously paid out 19,77% in May. Now in June, we will pay another SEK 400m, which means that we have paid about 69% of the total redemption request.

What happens to my early redemption request on May 4, 2020?

By virtue of paragraphs 10.1 to 10.3 i Terms and Conditions regarding the Fund's ability to await the redemption of profit-sharing loans, the Board decides that the Fund will handle the request for early redemption already received in such a way that the payments to the investors who requested redemption are divided and implemented as the Fund's liquidity so permits.
Payments during the period should be distributed pro-rata among investors as the Fund can liquidate positions or commitments in orderly form and without significant inconvenience to other investors.
Redemption shall, in accordance with clause 10.3 compared with 4.11 of the General Terms and Conditions, take place at the NAV rate determined at the end of the month that falls closest before the redemption date.

Can I withdraw my early redemption request?

Yes, it is possible if the Board of the Fund approves it.

How do I withdraw my requested redemption?

Request for withdrawal of application form early redemption of profit share loan is made in accordance with Information brochure and General Terms and Conditions.

You fill in the form Request for withdrawal of application form early redemption of profit share loan in Scandinavian Credit Fund I AB (publ) and email it to

A request for early redemption may only be revoked if the issuer admits it and is confirmed via email upon decision.
After a confirmed decision, the request for withdrawal is made from the next payment.

My sales orders were submitted on April 7. The redemption will then take place at the NAV course as of last April, which will be published on 4 May. Is this the course that will apply to all the payments that are made to me on an ongoing basis?

It is a fixed course during the entire payout period and in this case, the NAV course is published on May 4. In general, redemption must, according to clause 10.3 compared with 4.11 of the General Terms and Conditions, take place at the NAV rate that is determined at the end of the month that falls closest before the redemption date.

Will the customer see the correct NAV rate on the capital that he or she has requested to redeem on his / her depot during the period for which the deferred redemption is handled?

No, the customer will see the NAV course that we publish at each end of the month or the course from the secondary market as the same holding cannot have multiple NAV courses. Once the redemption takes place, the correct amount will be paid, ie at the NAV rate that was determined at the end of the month that occurred almost before the redemption day according to the terms.

What does it mean that you will pay out the money pro-rata?

Let's take an example. We had a redemption of approximately 780 million received as of April 8, 2020.
If we then have a customer who has submitted a redemption of 7.8 million, that is 1% of the total redemption.
This means that if the fund can pay out 150 million on May 13, 2020, that customer will receive 1.5 million, ie 19,23% of his requested redemption, which corresponds to his pro rata share of 1% of the payment amount.

How long will it take before my entire early redemption request is completed?

It depends on the Fund's maturity structure on underlying assets, which are bilateral loans to companies with a maturity of up to 48 months and the ability for borrowers to refinance their loans under prevailing market conditions.
The Fund's average maturity is 20 months.
The maturity structure and ability for borrowers to refinance their loans is crucial to how long it will take, but we believe it will take up to 12 months or earlier, depending on any inflows and maturity structure on the loan portfolio.

Does the same apply to all holders of Profit Loans regardless of where you bought them?

Yes, that applies regardless of where you bought the Profit Loan.

How does the Fund's primary market work?

The request for early redemption in the primary market can be made on a monthly basis and the redemption request must be made to the issuer 15 business days prior to the current month change.
Redemption will then be made to the current NAV at the current monthly change.

When does the first payout and payments then take place?

The first payment is made 7 business days after May 4, 2020 and the size depends on the liquidity of the fund.
Thereafter, it will be done monthly with 7 banking days after the 1st banking day of each month.
All payments are dependent on the Fund's liquidity and the Fund's ability to sell market-listed holdings and refinance loans that are due.

How much is paid at the end of each month?

In May 2020, approximately SEK 160 million will be paid, which corresponds to 19,77% of the requested redemption.

There was a fairly large outflow from the Kreditfonden (SEK 780m). What percentage of the withdrawals does the fund withstand?

The liquidity as of May 4, 2020 is expected to be approximately SEK 120-180m and will be paid “pro rata”.
The fund will pay out as much as possible and will do everything to create liquidity.
It is likely that a larger amount will be paid out in early June 2020.

In what order of redemption does the redemption take place?

All those who requested early redemption on April 8, 2020, with payment 7 banking days after May 4, 2020, will receive their payment "pro rata" to the entire redemption.

How does it work for those who submit the redemption request in the future?

The redemption request that comes in after April 8, 2020, for example, the redemption request as of June 1, 2020 will be redeemed after all redemptions as of May 4, 2020 have been redeemed, etc.
The request for redemption will be registered and redeemed to NAV at the current month-end when redemption is requested even if payment is postponed.

What are the dates for withdrawal of the redemption form?

When submitting a redemption form withdrawal, the last date is the same as the last day for subscription to stop until the next month change. So now in May was the last day we needed to get the form in order not to pay out May 26th. Then the payment is stopped and the customer receives the return in the future, ie from Nav set on June 1.

How does the Fund's liquidity work?

Liquidity risk for a company is the risk that the company will not be able to meet its payment obligations at the due date, ie the Fund does not have liquid funds to pay, for example, invoices or redemption amounts to Investors on time. The risk arises because the Fund finances itself by issuing Profit Sharing Loans, which entails payment obligations to the Investors. The risk may increase if the Fund finds it difficult to raise capital.
Liquidity risk may also arise in the Fund's Portfolio if the assets the Fund has invested in would be difficult to sell or if the Fund will find it difficult to liquidate the Portfolio or if it takes longer than expected to liquidate positions and sell investments.

Liquidity risk for a bond means the risk that the bond cannot be sold prematurely. Under normal market conditions, the Market Guarantor offers a purchase price for those who want to sell early. Although bonds in the form of profit share loans have become more established in recent times, the secondary market is still limited. Therefore, there is a risk that the liquidity of the Profit-Share Loans is low, and that they are traded at a price below the issue price. Sometimes it can be difficult or impossible to sell Profit-share loans during the term and it is then illiquid. This can occur, for example, in the event of significant market movements, liquidity changes, changes in regulations, hedging of positions, market disruptions, communication interruptions or other events that may cause difficulties in trading at reasonable prices or because of the affected or affected market place being closed, or that trade is subject to restrictions for a certain period of time.

What preferential scheme applies to direct loans if a loan object goes bankrupt?

Loans always come before shares in a bankruptcy. This means that if a company goes bankrupt or is forced to draw up a balance sheet, the lender can still have great values left in the company as loans always go before shareholders' capital.

What does the Fund's collateral look like?

The portfolio has a LTV of collateral (Loan To Value) as shown below and this table shows the pledged collateral, as well as the maturity and maturity structure of the portfolio.

SCFI, total portfolio

  • LTV 48%
  • Weighted LTV 67%


  • Medelvärde2021-12-03
  • Median 2021-09-24
  • Weighted 2022-03-03

LTV shows the relationship between the size of the loan and the value of the collateral. This means that if LTV is less than 100%, the loan amount is covered by the value of the collateral.

How often do you review LTV (Loan To Value) and who puts it?

You say that the weighted LTV is 0.67 on average. When is the valuation of the collateral made?
We look at it monthly. Right now we are doing it continuously. We have a team of 4 credit analysts and a CIO as well as the credit committee.

How does the canceled loan for the Hudya Group A / S affect the Fund's Net Asset Value (NAV)?

The Fund has already made provisions for this loan in recent times, in other words, this event in the near future will not affect the NAV at all.

Will Kreditfonden run its own subsidiary Hudya Group A / S, if so how?

We have set up a management company and there is an SPV (Special Purpose Vehicle) that owns the subsidiaries. Kreditfonden will not manage these companies on their own. This will be the previous management team doing this. We have great confidence in their ability to push this forward together with the new CEO who has a long and solid experience from the fintech industry where he has successfully developed companies.

What does it mean for the fund to repay the loan for Hudya Group A / S?

The consequence is that existing shareholders of the parent company, who are now going bankrupt, lose large parts of their investments. It remains to be seen what values there may be left in the bankruptcy estate. However, the credit fund has its mortgages and the companies in which we made self-entry are mortgaged in favor of the fund. If there is something further in the bankruptcy estate, it will also accrue to the fund, but we do not expect it.

Will Hudya Group A / S's subsidiaries be sold during the month of July or what will the plan look like?

They are unlikely to be sold on this site at the turn of the year. The credit fund is a long-term owner and is there to create value for the fund unit owners. Stressing out a sale would be a bad deal. We will do everything we can to make this as good as possible for the unit owners.

When will the shareholders receive any profits from the sales of Hudya Group A / S?

It is difficult to predict the time for this, but probably no subsidiaries will be sold before the end of the year 2020/21.

What is the Fund's Investment Strategy?

The Fund's strategy is to find investment opportunities through Lending. Possible Lenders are, for example, companies that are in some form of expansion, need financing for investment, restructuring, refinancing bridge financing, management of generational shifts or seasonal needs. The fund's lending objects are primarily found in Scandinavia and Finland.
The loans that are granted are normally secured by a mortgage, guarantee or the like. In special cases, unsecured loans can be made. The Fund always conducts a careful assessment of the Borrower, pledged assets and mortgages. The fund seeks creditors with a documented history of operating income, cash flow or events that lead to positive cash flow and repayment ability and security for the loans.
The investment strategy is that at least 50 percent of the Portfolio is invested in Credits. The term of the loan agreements is up to 4 years. The total risk thus depends on the Creditors profile and other investments made by the Fund. The fund has a diversified portfolio, which leads to risk diversification, directly or indirectly via underlying collateral.
Creditors are evaluated and approved by the Fund's investment committee following a systematic credit process. The fund's return depends, among other things, on the level of lending in the Portfolio and may vary over time. The Fund strives to systematically engage with Lenders whose expected return is positive in relation to the credit risk that the commitment entails. The individual commitments are weighed against each other in order to achieve an efficiently balanced credit risk for the Fund as a whole. Direct loans have a low correlation with other markets.
The portfolio may consist of the following assets:
(i) invoices and other entitlements;
(ii) credit claims (direct lending in accordance with the Fund's Credit Policy);
(iii) fund units;
(iv) interest rate and credit related derivatives;
(v) shares and share-related derivatives;
(vi) interest-bearing instruments such as bonds;
(vii) currency and currency-related derivatives; and
(viii) bank deposits.

How is the return on profit share loans affected for those who choose not to withdraw their money?

The fund will continue to generate returns just as usual, since the underlying loans are not affected by the request for early redemption. However, the Fund will reduce the assessment of the expected net return for the year 2020 for the Fund from 6–8% to 3–5% due to covid-19's impact on companies. As for the reduced expected return for 2020, it is based on a precautionary principle and does NOT have to do with the fact that we have information about credit losses that have not been communicated before. Provisions for loan losses are made on an ongoing basis in accordance with the accounting standard IFRS 9. All known information is reflected in the latest NAV. However, we want to emphasize that we closely monitor all holdings and that our collateral for the loans remains good. See also "What is the Fund's Investment Strategy?".

Do you believe that deferral of interest payments will be extensive in the near future in the fund?

We believe it will be more than normal but manageable. The new guidelines from ESMA mean some relief regarding increased provision if you see that the company has a positive future. In cases where deferral is relevant, we will require the owners to contribute capital, provide supplementary collateral and / or even a share in equity.

What proportion of real estate (if any) are development projects?

In practice, we have no development properties

What is the yield on the portfolio?

Unfortunately we cannot answer that because we are listed on the stock exchange. For more information see our Year-end Report at

How are the corresponding players doing today in Europe and the US? Do you keep open or close? Do you see any change in interest rates today and if so by how much?

Most funds that have the same orientation as us are closed institutional funds and we therefore have no information at present on how other funds are acting in the current market situation.

Which business do we typically find under the heading Finance and what direction do we have under Real Estate (development project?)

Real estate is primarily rental property and finance is factoring and consumer credit.

How does the Fund's IFRS provisions work?

The fund complies with IFRS9 and reserves monthly for expected future loan losses. In the model for expected credit losses, the reserve is valued based on the estimated risk at the time of calculation, whether a significant increase in credit risk has occurred since the first reporting date, expected future value of collateral and assessed macroeconomic development, even though no actual loss event has occurred.
Furthermore, the company primarily uses external information. The information consists of past events, current circumstances and reasonably verifiable forecasts of future economic conditions that could affect expected future cash flows. When calculating the expected loan losses, both asset-specific and macroeconomic factors are taken into account and reflect the company's expectations of these.
The Fund calculates the reserve requirement for expected loan losses based on exposure in case of default, EAD, for each individual credit. The EAD includes the loan amount, unpaid interest and the cost of releasing the collateral. The exposure is reduced by an adjusted value for the collateral that is available for each credit and thus receives the expected loss in the event of default, LGD. The expected loss is then multiplied by the probability of an actual credit event, PD, which provides the reserve need for the credit's expected loss, ECL.
The collateral that the company can obtain in connection with the granting of credit can consist of mortgages in real estate, shares in listed and unlisted companies, invoice claims, guarantees from owners, etc. The assessed value of the collateral is reduced according to an internal model with between 80% down to 20% depending on the type of collateral obtained.

The adjusted safety value is used in the model to calculate LGD. Regardless of whether the adjusted collateral value exceeds the exposure, EAD, LGD is always calculated as at least 12% by EAD for categories 1 and 2. This makes provision for the model always made even if the adjusted collateral value exceeds or is equal to the exposure. The expected loss, LGD, as above is multiplied by the probability of an actual credit event.
The Fund reviews its loan receivables on a monthly basis to assess the need for provisions according to the model. The assessment is made individually for each loan agreement, after which the total reserve is summed up.

If the fall in March was about - 1 % due to corporate bonds (market quoted), does this mean that the other portfolio returned 0.18%? In that case, it may feel a little low compared to other months, and does this mean that the fund has had to reserve more capital according to IFRS due to possible bankruptcies or companies that do not pay interest?

In addition to lower valuation of market-listed holdings, NAV was also affected in March by an increased IFRS provision. IFRS9 is not a credit loss recorded, but the provisions made will be reversed when the loan matures.

How do credit losses occur if you always have greater collateral than the loan? I suppose security is not stable but falls in value. But how does this work in practice?

So far, since the start, we have had only one recorded loss. As we mentioned in the May 2019 monthly letter, we were exposed to a fraud discovered in April 2019. That commitment is still not a recorded loss as the bankruptcy has not yet ended. On the other hand, account is taken of the loss in the reservation that exists. It is clear that the security value is also affected in a default situation. That is why when assessing the collateral value we make a general reduction of the value depending on the type of collateral in question. Thus, "height" is taken so that the value of the collateral may decrease.

You have previously had a credit loss via bond against RAG, how much of the portfolio today has exposure to bonds against RAG?

We have less than 4% exposure to JOOl and do not currently see that these holdings will have a negative impact on NAV, we follow them and all other holdings very closely.

A large part of the decline in March was due to the listed assets. If I understand it correctly, you still have them, which means that when pricing is stabilized, the fund will be positively affected instead, have I understood everything correctly then?

It is true that if we can hold the bonds to maturity and are not forced to sell due to the need for liquidity, the value should go towards pairs.

Have you sold any corporate bonds?

We sold a large part of our holdings in corporate bonds as early as February before the crisis.

You state that HY exposure is "less than 5% of the fund", which sounds like a very large part of the liquidity / cash position?

No, the entire cash register is not invested in HY. In order to be able to make new direct loans, we need to keep a cash register that covers the business that is going on without selling what is invested.

Why do you invest liquidity / cash in HY? Is it reasonable for unit holders to bear such a risk that has nothing to do with the fund?

Under normally stressed markets, it has worked extremely well with a smaller part in HY which also provided good returns to the fund. At present, the proportion is below 5%. We believe and hope that together with us you can ensure that there can be inflows as it has been and will be a good investment in the future in this market climate.

If it were that SCFI would have to close due to liquidity, could it be possible that a secondary market could be created so that customers could have the opportunity to come out?

There is already a secondary market working today. Rather, it's a question of what price customers might want to sell at.

How does the Fund's secondary market work?

The profit share loans are listed on the regulated market Main Regulated, which is operated by Nordic Growth Market (NGM) and they are freely transferable according to Swedish law. The profit share loan's ISIN code is SE 0007897384. However, there may be restrictions that result from laws in other countries or Swedish law.

Under normal market conditions, the Market Guarantor will offer buy and sell prices for those who wish to trade with Profit Sharing Loans outside the redemption framework. However, the second hand market and liquidity may be limited.
It should be noted that the difference between the purchase price and the selling price ("spread") for the profit share loans can change continuously. It should also be noted that during certain time periods it may be difficult or impossible to set purchase prices and selling prices, which may make it difficult or impossible to buy or sell Profit Sharing Loans prematurely.

The market guarantor is ABG Sundal Collier ASA (the "Market Guarantor"). In accordance with a contractual agreement, the market guarantor has undertaken to provide a secondary market for the Profit Share Loan under normal market conditions and ordinary trading hours. The market guarantor provides liquidity by continuously offering, on its own behalf, buy and sell rates for Investors who wish to buy or sell Profit-sharing loans.

Emma Westerberg

Just enter your details and we will contact you as soon as possible to find a time to book a meeting.

Please note that we can not accept inquiries below SEK 20 million.

Or call us