Vanliga frågor om inlösen, covid-19 och förväntad avkastning

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

In the spring of 2020, a press release was published by Scandinavian Credit Fund I that the fund, to act in the best interest of all investors, decided to wait to meet a notification of early redemption of the equivalent of SEK 780 million. Payments must instead be portioned out and carried out continuously as the fund receives liquidity from overdue loans. The fund also communicated that the expected return is being lowered from an annual net return of 6-8 percent to 3-5 percent for 2020. This against the background of covid-19.

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

We would like to emphasize that the fund formally NOT is closed. The fact that early redemptions cannot be met for the month of May has to do with the fact that the fund needs time to collect amortizations 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 were not previously communicated. Reserves for credit losses are made on an ongoing basis according to 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 a disadvantageous valuation.

How much is paid out in September?

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

How much is paid out in August?

We will redeem approx. SEK 330m in August, which means that the entire redemption for April and May has been redeemed as well as 65% from June.

How much is paid out in July?

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

How much is paid out in June?

On the redemption request of approx. 800 million that came in as of April 8, we have already paid out 19,77% in May. Now in June, we will pay out another approx. 400 msec, which means that we have then paid out approx. 69% of the total redemption request.

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

With the support of points 10.1 – 10.3 i Terms and Conditions regarding the Fund's option to wait to redeem profit-sharing loans, the board decides that the Fund shall handle requests for early redemption that have already been received in such a way that the payments to the investors who requested redemption are divided and carried out continuously as the fund's liquidity allows.
Payments during the period must be distributed pro rata between investors as the Fund can liquidate positions or engagements in an orderly manner and without significant inconvenience to other investors.
Redemption must, according to point 10.3 compared to 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 revoke my requested redemption?

The request for withdrawal of the notification form for early redemption of profit share loans takes place in accordance with Information brochure and General terms and conditions.

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

A request for early redemption may only be withdrawn if the issuer allows it and confirmed via email after decision.
After the decision has been confirmed, the request for withdrawal from the next payment is made.

My sell order was submitted on April 7th. Redemption then takes place at the NAV rate as of the end of April, which is published on May 4. Is this the rate that will apply to all the payments that are made to me on an ongoing basis?

It is a fixed rate throughout the current payment period and in this case it is the NAV rate that is published on May 4. In general, according to point 10.3 compared to 4.11 of the General Terms and Conditions, redemption must take place at the NAV rate determined at the end of the month closest to the redemption date.

Will the customer see the correct NAV rate on the capital for which he or she requested redemption in his deposit during the period that the deferred redemption is handled?

No, the customer will see the NAV rate that we publish at the end of each month, alternatively the rate from the secondary market because the same holding cannot have multiple NAV rates. Once redemption takes place, the correct amount will be paid out, i.e. at the NAV rate determined at the end of the month closest to the redemption date 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 approx. 780 million that came in as of April 8, 2020.
If we then have a customer who sent in 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, i.e. 19.23% of his requested redemption, which corresponds to his pro rata share of 1% of the payout amount.

How long will it take for my entire early redemption request to be processed?

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

Does the same apply to all holders of Vinstandelslån, regardless of where they were bought?

Yes, this applies regardless of where you bought the Vinstandelslån.

How does the fund's primary market work?

The request for early redemption in the primary market can be made monthly and the request for redemption must reach the issuing institution 15 banking days before the current change of month.
Redemption then takes place at the current NAV at the current turn of the month.

When does the first payment and subsequent payments take place?

The first payment takes place 7 banking days after 4 May 2020 and the size is dependent on the fund's liquidity.
Thereafter, it will take place 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 fall due.

How much is paid at the end of each month?

During May 2020, approximately SEK 160m will be paid out, which corresponds to 19,77% of requested redemption.

There was quite a large outflow from the Credit Fund (SEK 780 million). What percentage of withdrawals does the fund have?

The liquidity as of May 4, 2020 is estimated to be approximately SEK 120-180m and will be paid "pro rata".
The fund will pay out as much as possible and do everything to create liquidity.
Most likely, a larger amount will be paid out at the beginning of June 2020.

In what order do redemptions take place?

All those who requested early redemption as of April 8, 2020, with payout 7 banking days after May 4, 2020, will receive their payout "pro rata" until the entire redemption is completed.

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

Redemption requests received after April 8, 2020, e.g., June 1, 2020 redemption requests will be redeemed after all May 4, 2020 redemptions are redeemed, etc.
The request for redemption will be registered and redeemed to NAV at the relevant end of the month when redemption is requested, even if payment is postponed.

What dates apply for withdrawal of the redemption form?

When sending in the withdrawal of the redemption form, the last date is the same as the last day for subscription in order to have time to stop until the end of the next month. So now in May, the last day we needed to get the form in to not pay out was May 26. Then the payment is stopped and the customer receives the return going forward, i.e. from Nav which is set on 1 June.


How does the fund's liquidity work?

Liquidity risk for a company is the risk that the company cannot fulfill its payment obligations at the due date, i.e. that the Fund lacks 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 Share Loans, which entail payment obligations towards the Investors. The risk may increase if the Fund finds it difficult to raise capital.
Liquidity risk can also arise in the Fund's Portfolio, if the assets the Fund has invested in would be difficult to dispose of or if the Fund finds it difficult to liquidate the Portfolio or if it takes longer than expected to liquidate positions and sell investments.

Liquidity risk means for a bond the risk that it is not possible to sell the bond early. Under normal market conditions, the Market Guarantor offers a purchase price for those who want to sell early. Although bonds in the form of Dividend Loans have become more established recently, the secondary market is still limited. There is therefore 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, for example, occur in the event of strong market movements, changes in liquidity, changes in regulations, hedging ("hedging") of positions, market disruptions, communication interruptions or other events which may lead to difficulties in trading at reasonable rates or due to the market place concerned being closed, or that trade is subject to restrictions for a certain period of time.

Security & Panther

Which priority order 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 control balance sheet, the lender can still have large values left in the company as loans always come before the shareholders' capital.

What does the Fund's collateral look like?

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

SCFI, total portfolio

  • LTV 48%
  • Weighted LTV 67%


  • Average value 2021-12-03
  • 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 the LTV is less than 100%, the loan amount is covered by the value of the collateral.

How often do you review the LTV (Loan To Value) and who sets this?

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

How does the terminated loan for 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 Hudya Group A/S subsidiaries under its own auspices, if so how?

We have set up a management company and there is an SPV (Special Purpose Vehicle) that owns the subsidiaries. The credit fund will not manage these companies under its own auspices. It will be the former operational management that does this. We have great confidence in their ability to drive 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 that the fund revokes the loan for Hudya Group A/S?

The consequence is that existing shareholders of the parent company, which is now declared bankrupt, lose large parts of their investments. It remains to be seen what value there may be left in the bankruptcy estate. However, the credit fund has its pledges and the companies that we entered into are pledged in favor of the fund. If there is anything additional in the bankruptcy estate, it will also go to the fund, but we do not count on that.

Will Hudya Group A/S subsidiary be sold during the month of July or what does the plan look like?

They will probably not be sold on this site at the end of the year. The credit fund is a long-term owner and is there to create value for the fund shareholders. Rushing a sale would be bad business. We will do everything we can to make this as good as possible for the unit owners.

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

It is difficult to say when this will happen, but it is likely that no subsidiaries will be sold before the turn of the year 2020/21.

Expected return

What is the fund's Investment Strategy?

The fund's strategy is to find investment opportunities through lending. Possible Borrowers are, for example, companies that are in some form of expansion, need financing for investment, restructuring, refinancing, bridging financing, handling generational changes or seasonal needs. The fund's lending objects are found primarily in Scandinavia and Finland.
The loans that are provided are normally secured by a pledge, surety or similar. In special cases, unsecured loans can be granted. The fund always carries out a careful assessment of the Borrower, pledged securities and pledges. The fund seeks borrowers with a documented history of operating profit, cash flow or events that lead to positive cash flow as well as 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 Borrowers' profile and on other investments that the Fund makes. The fund has a diversified portfolio, which leads to risk spreading, directly or indirectly via underlying collateral.
Borrowers 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 lending ratio in the Portfolio and can vary over time. The fund strives to systematically enter into engagements with Borrowers whose expected return is positive in relation to the credit risk that the engagement entails. The individual commitments are weighed against each other in order to achieve an effectively 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 claims,
(ii) credit claims (direct lending in accordance with the Fund's Credit Policy),
(iii) fund shares,
(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) deposit in bank.

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

The fund will continue to generate returns just as usual as the underlying loans are not affected by the request for early redemption. However, the Fund lowers the assessment of the expected net return for the year 2020 for the Fund from 6–8% to 3–5% due to the impact of covid-19 on companies. Regarding the reduced expected return for 2020, it is based on a precautionary principle and is NOT related to the fact that we have information about credit losses that were not previously communicated. Reserves for credit losses are made on an ongoing basis according to the accounting standard IFRS 9. All known information is reflected in the latest NAV. However, we would like to emphasize that we carefully follow all holdings and that our collateral for the loans is still good. See further under "What is the fund's Investment Strategy?"

Do you assess that deferrals with interest payments will be extensive in the near future in the fund?

We think it will be more than normal but manageable. The new guidelines from ESMA mean some relief regarding increased provisioning if it is seen that the company has a positive future. In cases where deferment is relevant, we will demand that the owners contribute to capital, provide additional collateral and/or even a portion in equity.

What percentage of properties (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 do equivalent actors like you do today in Europe and the US? Do you stay 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 the moment about how other funds act in the current market situation.

What activities do we typically find under the heading Finance and what focus do we have under Real Estate (development projects?)

Property is primarily rental property and finance is factoring and consumer credit.

Credit losses / IFRS9

How do the Fund's IFRS reserves work?

The fund complies with IFRS9 and reserves funds each month for expected future credit losses. In the expected credit loss model, 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 accounting period, the expected future value of collateral and assessed macroeconomic development, even if no actual loss event has occurred.
Furthermore, the company primarily uses external information. The information consists of past events, current circumstances and reasonable verifiable forecasts of future financial conditions that could affect expected future cash flows. When calculating the expected credit losses, both asset-specific and macroeconomic factors are taken into account and reflect the company's expectations about these.
The fund calculates the reserve requirement for expected credit losses based on exposure in the event of default, EAD, for each individual credit. EAD includes the loan amount, unpaid interest and costs for releasing the security. The exposure is reduced by an adjusted value for the collateral available for the respective credit and thus obtains 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 gives the reserve requirement for the expected loss of the credit, ECL.
The collateral that the company can obtain in connection with the granting of credit can consist of mortgages on real estate, shares in listed and unlisted companies, invoice receivables, guarantees from owners, etc. The assessed value of the collateral is reduced according to an internal model by between 80% down to 20% depending on the type of collateral obtained.

The adjusted safety value is used in the model to calculate the LGD. Regardless of whether the adjusted security value exceeds the exposure, EAD, the LGD is always calculated as at least 12% of EAD for credits in categories 1 and 2. This means that provision according to the model is always made even if the adjusted security 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 monthly 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 added up.

If the decline in March was about – 1 % due to the corporate bonds (market quoted), does that mean that the rest of the portfolio returned 0.18%? If so, it might feel a little low compared to other months, and does it mean that the fund has had to reserve more capital according to IFRS due to possible bankruptcies or companies that don't pay interest?

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

How do established credit losses arise if you now always have greater security than the loan? I assume the security is not stable but falling in value. But how does this work in practice?

So far, since the start, we have only had one confirmed loss. As we mentioned in the monthly newsletter for May 2019, we were exposed to a fraud that was discovered in April 2019. That commitment is still not a confirmed loss as the bankruptcy has not yet been completed. However, the loss is taken into account in the existing reserve. It is clear that the security value is also affected in a default situation. This is why, when assessing the security value, we make a general reduction of the value depending on the type of security in question. Thereby "height" is taken because the value of the security may decrease.

You previously had a credit loss via bonds against JOOL, how much of the portfolio currently has exposure to bonds against JOOl?

We have less than 4% exposure to JOOl and do not currently see that these holdings will affect NAV negatively, we follow them and all other holdings very carefully.

Marketable assets

A large part of the decline during the month of March was due to the listed assets. If I understand correctly, you still have them, which means that when the 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 until maturity and are not forced to sell due to the need for liquidity, the value should go towards par.

Have you sold any corporate bonds?

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

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

No, the entire fund 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 deals that are in progress without selling what is placed.

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

During normally stressed markets, it has worked perfectly well with a smaller part in HY, which also added a good return to the fund. Currently, the share is under 5%. We believe and hope that you, together with us, ensure that there can be inflows because it has been and will be a good investment going forward in this market climate.

Secondary market

If it were to be the case that SCFI will have to close due to liquidity, is it conceivable that a secondary market can be created so customers can have the opportunity to get out?

There is already a functioning secondary market today. It is rather a question of what price customers can imagine selling at.

How does the Fund's secondary market work?

The profit share loans are listed on the regulated market Main Regulated, which is run 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 follow from laws in other countries or from Swedish law.

Under normal market conditions, the Market Guarantor will offer buy and sell rates for anyone who wants to trade in Profit Share Loans outside the scope of redemption. However, the secondary market and liquidity may be limited.
It should be noted that the difference between the purchase price and the sale price ("spread") for the Profit Share Loans can change on an ongoing basis. It should also be noted that during certain periods of time it may be difficult or impossible to set buying and selling prices, which means that it may be difficult or impossible to buy or sell Profit Share Loans early.

The market guarantor is ABG Sundal Collier ASA (the "Market guarantor"). The market guarantor has, in accordance with an assignment agreement, undertaken to provide a secondary market for the Vinstandelslån under normal market conditions and ordinary trading hours. The market guarantor provides liquidity by continuously and for its own account offering buy and sell rates for Investors who want to buy or sell Profit Share Loans.