3 unchanged sentences
When multiple inputs are used within the valuation techniques for loans, a change in one input in a certain direction may be offset by an opposite change from another input.
−Removed: We recorded a fair value mark-to-market adjustment related to our Fair Value Loans and Fair Value Notes of $69.4 million for the year ended December 31, 2021, an increase of approximately $92.8 million compared to the prior year.
+Added: We recorded a fair value mark-to-market adjustment related to our Loans Receivable at Fair Value and asset-backed notes of $119.7 million for the year ended December 31, 2022, an increase of approximately $50.4 million compared to the prior year.
Credit Performance Sensitivity
−Removed: In a strong economic climate, credit losses may decrease due to low unemployment and rising wages, which will increase the fair value of our Fair Value Loans, which increases Net Revenue.
−Removed: In a weak economic climate, credit losses may increase due to high unemployment and falling wages, which will decrease the fair value of our Fair Value Loans, which decreases Net Revenue.
+Added: In a strong economic climate, credit losses may decrease due to low unemployment and rising wages, which will increase the fair value of our Loans Receivable at Fair Value, which increases Net Revenue.
+Added: In a weak economic climate, credit losses may increase due to high unemployment and falling wages, which will decrease the fair value of our Loans Receivable at Fair Value, which decreases Net Revenue.
The following table presents estimates at December 31, 2022.
Actual results could differ materially from these estimates:
−Removed: Remaining Cumulative Charge-Offs Projected percentage change in the fair value of our Fair Value Loans Projected change in net fair value recorded in earnings
+Added: Remaining Cumulative Charge-Offs Projected percentage change in the fair value of our Loans Receivable at Fair Value
+Added: Projected change in net fair value recorded in earnings
($ in thousands)
5 unchanged sentences
Market Rate and Interest Rate Sensitivity
−Removed: The fair values of our Fair Value Loans are estimated using a discounted cash flow methodology, where the discount rate considers various inputs such as the price that we can sell loans to a third party in a non-public market, market conditions such as interest rates, and credit spreads.
+Added: The fair values of our Loans Receivable at Fair Value are estimated using a discounted cash flow methodology, where the discount rate considers various inputs such as the price that we can sell loans to a third party in a non-public market, market conditions such as interest rates, and credit spreads.
The discount rates may change due to expected loan performance.
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The interest rate on the Secured Financing - CCW facility is LIBOR, with a floor of 1.00% , plus 6.00% on the first $18.8 million of principal outstanding and LIBOR, with a floor of 0.00% , plus 3.41% on the remaining outstanding principal balance and the maximum borrowing amount is $150.0 million.
+Added: On March 8, 2023, the Credit Card Warehouse facility was amended, reducing the maximum borrowing amount from $150.0 million to $120.0 million.
As of December 31, 2022, we had $85.7 million outstanding under our Acquisition Financing.
−Removed: The interest rate of the Acquisition Financing is 1-month LIBOR plus a spread of 8.00%.
−Removed: Changes in interest rates in the future will likely affect our borrowing costs of our Secured Financing facilities and Acquisition Financing.
−Removed: While not carried at fair value on the Consolidated Balance Sheets, we do not expect changes in interest rates to impact our Secured Financings or Acquisition Financing facility.
−Removed: In a strong economic climate, interest rates may rise, which will decrease the fair value of our Fair Value Loans, which reduces Net Revenue.
−Removed: Rising interest rates will also decrease the fair value of our Fair Value Notes, which increases Net Revenue.
−Removed: Conversely, in a weak economic climate, interest rates may fall, which will increase the fair value of our Fair Value Loans, which increases Net Revenue.
−Removed: Decreasing interest rates will also increase the fair value of our Fair Value Notes, which reduces Net Revenue.
+Added: The interest rate of the Acquisition Financing is SOFR plus a spread of 8.00%.
+Added: As of December 31, 2022, we had $150.0 million outstanding under our Corporate Financing.
+Added: The interest rate of the Corporate Financing is SOFR plus a spread of 9.00%.
+Added: On March 10, 2023 we upsized and amended our Corporate Financing facility to be able to borrow up to an additional $75.0 million.
+Added: We borrowed $20.8 million of Incremental Tranche A-1 Loans and intend to borrow an additional $4.2 million of Incremental Tranche A-2 Loans on or about March 27, 2023, which amount has been committed by the applicable lenders.
+Added: We may borrow up to an aggregate additional amount of $50.0 million on an uncommitted basis, in two $25.0 million tranches, expected to be available, if provided by the applicable lenders, on or about April 21, 2023 and June 23, 2023, respectively.
+Added: The term loan now bears interest at an amount payable in cash equal to 1-month term SOFR plus 9.00%, plus an amount payable in cash or in kind, at the Company’s option, equal to 3.00%.
+Added: Changes in interest rates in the future will likely affect our borrowing costs of our Secured Financing facilities, Acquisition Financing and Corporate Financing.
+Added: While not carried at fair value on the Consolidated Balance Sheets, we do not expect changes in interest rates to impact the fair value of our Secured Financing facilities, Acquisition Financing or Corporate Financing facility.
+Added: In a strong economic climate, interest rates may rise, which will decrease the fair value of our Loans Receivable at Fair Value, which reduces Net Revenue.
+Added: Rising interest rates will also decrease the fair value of our asset-backed notes, which increases Net Revenue.
+Added: Conversely, in a weak economic climate, interest rates may fall, which will increase the fair value of our Loans Receivable at Fair Value, which increases Net Revenue.
+Added: Decreasing interest rates will also increase the fair value of our asset-backed notes, which reduces Net Revenue.
Because the duration and fair value of our loans and asset-backed notes are different, the respective changes in fair value will not fully offset each other.
1 unchanged sentence
Actual results could differ materially from these estimates:
−Removed: Change in Interest Rates Projected percentage change in the fair value of our Fair Value Loans Projected percentage change in the fair value of our Fair Value Notes Projected change in net fair value recorded in earnings
+Added: Change in Interest Rates Projected percentage change in the fair value of our Loans Receivable at Fair Value
+Added: Projected percentage change in the fair value of our asset-backed notes Projected change in net fair value recorded in earnings
($ in thousands)
15 unchanged sentences
Actual results could differ materially from these estimates:
−Removed: Remaining Cumulative Prepayments Projected percentage change in the fair value of our Fair Value Loans Projected change in net fair value recorded in earnings
+Added: Remaining Cumulative Prepayments Projected percentage change in the fair value of our Loans Receivable at Fair Value
+Added: Projected change in net fair value recorded in earnings
($ in thousands)
10 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.