This will be a 3-part newsletter that we will be sharing with our investors. With everything else going on, we wanted to update you on the upcoming loan pools and what changes this brings to our investors. We have put great effort into implementing all the needed processes for the technical side to ensure that payments, investments, function as they should. Also, we want to bring the best user experience to our investors.

In these newsletters, we will give you all the details needed for you to have the full picture of what is happening on TWINO’s side.

So, what are these new products?

Loan pools are asset-backed securities, i.e., securities that are backed by a pool of at least 10 loans that an investor can purchase. The return on the Security is fixed with an interest rate of 8% per annum and applied to the invested amount by the investor. For our veteran investors, who have been investing in loans, not much will change, as the process will be very similar to investing in loans.

What will change is the term for these loan pools. The average term of the product is 36 months, but exceptional cases might apply, where the term of individual underlying loan reaches up to 60 months. Additionally, extensions will also be available for these loan pools, however, investors will still be earning the fixed return of 8% for the whole period the Security is outstanding.

The Security will have an investor protection mechanism. In case the underlying asset pool does not perform according to the schedule, the payments to the investors will continue according to the schedule – guaranteed and made by TWINO (“Payment Guarantee”). Also, these loan pools can be placed for sale on the Secondary market if the investor wants to exit their position sooner.

Are there any risks?

Loan pools come with the TWINO guarantees, therefore the guarantees are the same as they came with the loans. Furthermore, there are no costs to invest in the product or to sell it on the secondary market. You will be able to sell these with a premium or a discount. The investor is not subject to any one-off costs, nor any recurring costs, incidental costs, or performance fees.

Another change that will take effect is that we will have to impose a withholding tax on the profits that you obtain from investing into loan pools. Since the securities are issued in Latvia, it will be 20%. This means that investors will have to advise their local tax office that on these investments the tax has already been withheld to avoid double-taxation.