The Outcomes Statement provides a transparent view of how the loan book has performed relative to expectations. Investor outcomes may vary depending on diversification and reinvestment.
Limitations of the Data
The Outcomes Statement reflects historic performance and current assessments of the Relendex loan book, but is subject to limitations.
Recovery timelines may delay the recognition of losses, some loans may not yet have been exposed to the full risk of formal default, and expected loss assumptions may change over time. Investor outcomes will also vary depending on diversification and reinvestment. Past performance is not a reliable indicator of future results.
Defaults and Losses
Defaults and losses are related, but they are not the same.
A formal default occurs when a borrower fails to meet the terms of a loan and the loan is formally classified as being in default. However, a default does not necessarily result in a loss of capital. This is because:
- Loans are secured against property and other assets
- Recovery processes are actively managed
- Default interest may be applied, which is typically higher than the standard interest rate
As a result, a loan may enter formal default and still be repaid in full, and in some cases may deliver a higher return than originally expected. Defaults do not necessarily result in a loss, as recoveries may reduce or eliminate any capital loss.
Expected vs Actual Default Rates
The Outcomes Statement includes both expected and actual default rates.
- Actual Default Rate reflects the proportion of loans that have entered formal default, expressed as a percentage of total loans originated.
- Expected Default Rate is derived from historic formal default performance of the loan book.
For the 2025 reporting period, these figures are aligned, as both are based on observed historic formal defaults across all loans originated.
This approach reflects Relendex’s methodology:
- The loan book is reviewed in full each year
- Each loan is assessed individually
- No statistical modelling or sampling is used
These figures are reviewed annually and may diverge in future if performance trends change or where additional forward-looking adjustments are considered appropriate.
Formal default is assessed at the loan level. Where a loan enters formal default, all tranche segments within that loan are treated as being in formal default.
Returns
Returns shown in the Outcomes Statement take account of both the interest rate and the associated risk.
The Interest Rate (IR) represents the gross return generated by loans, Expected Loss reflects the potential impact of defaults, and Expected Net Return shows the return after allowing for this risk.
This provides a view of performance that recognises that not all formal defaults result in losses, that losses where they occur are typically lower than default rates, and that risk varies across different tranche segments.
Cash Drag
The expected net return assumes that an investors funds are fully deployed throughout the year. Investors returns will be reduced by ‘cash drag’ which reflect the fact that uninvested funds do not receive any return.
Minimising cash drag will increases investors actual returns.
Diversification
Expected net returns assume an optimally diversified portfolio. Individual investors’ outcomes can outperform and under perform where their portfolios are under/over exposed to defaulting loans.
Farringdon Portfolio
Clients of Farringdon Portfolio Limited are provided with portfolios balanced to suit their risk profiles. This service provides diversification across the loan book.
How to Read the Outcomes Table
The table below shows how different parts of the Relendex loan book have performed and how we assess risk and return across each risk category. Each column is explained below.
Category
This groups loans based on their position within the loan structure and overall risk profile. Risk categories allow investors to compare performance across different levels of risk within the portfolio. A description of each risk category can be found in the Outcomes table and is intended to give context to the risk and return profile of each category.
Number of Loans
This shows the number of loans allocated to each tranche segment. It provides context on how the loan book is distributed across different risk categories and does not indicate performance or default levels.
Interest Rate
The Interest Rate represents the gross return generated by loans within each risk category, before taking account of potential losses.
Expected Default Rate (PD)
The Expected Default Rate or Probability of Default (PD) represents the proportion of loans expected to enter formal default, based on historic performance of the loan book. For the current reporting period, this is aligned to the actual default rate and is reviewed annually.
Actual Default Rate
The Actual Default Rate represents the proportion of loans that have entered formal default, expressed as a percentage of total loans originated. It reflects realised default performance across the loan book and provides a measure of how frequently defaults have occurred to date.
For the current reporting period, this aligns with the expected default rate, as both are derived from historic performance.
Loss Given Default (LGD)
Loss Given Default (LGD) represents the percentage of an investor’s original capital that is expected to be lost if a loan enters formal default, after recoveries have been realised.
Expected Loss
Expected Loss combines the likelihood of formal default (PD) and the potential loss if a formal default occurs (LGD). It provides an estimate of the overall risk to capital within each tranche segment.
Expected Net Return
Expected Net Return represents the return after allowing for potential losses. It is calculated by deducting the expected loss from the gross interest rate, providing a view of performance after taking risk into account.
Outcomes Table – Investor Returns
| Risk Category | Tranche Segment | Tranche Segment Description | Number of Loans | Interest Rate* | Expected Loss** | Expected Net Return** |
|---|---|---|---|---|---|---|
| A+ | Senior A (RSP) | Loans to highly experienced or successful repeat Relendex borrowers within the Relendex Select Portfolio. Secured by a first-ranking charge at low loan-to-value levels. Compared to other categories, these loans have the highest likelihood of full capital repayment if the borrower defaults, although losses are still possible in adverse conditions. | 11 | 7.49% | 0.04% | 7.45% |
| A | Senior A | Loans secured by a first ranking charge at low loan-to-value levels, made to borrowers outside the Relendex Select Portfolio. These loans carry slightly higher risk than A+ loans due to borrower profile, but investors still have a strong likelihood of capital repayment if the loan defaults. | 15 | 7.53% | 0.08% | 7.45% |
| B | Senior B | Loans secured by a first-ranking charge at higher loan-to-value levels. There is less protection if property values fall, meaning investors face a higher risk of partial capital loss compared to lower-risk categories. | 25 | 8.41% | 0.42% | 7.99% |
| B | Senior C | Loans secured by a first-ranking charge, but with less headroom between the loan amount and property value. In a default, there is a material risk that not all capital will be repaid, particularly at the upper end of the LTV range for this category, if property values decline or delays occur. | 8 | 9.08% | 0.83% | 8.25% |
| C | Mezzanine | Loans secured by a second-ranking charge, repaid after all the amounts due under the senior loan. In a default scenario, investors are least likely to recover their full investment, especially if property values fall or enforcement costs are high. | 10 | 10.81% | 2.08% | 8.73% |
*Returns are presented using the contractual interest rate on loans. The effective interest rate (EIR) for investors may be higher where interest and capital repayments are reinvested promptly; however, this will depend on individual reinvestment behaviour, timing, and the availability of loans in the Marketplace. Therefore, no assumption of reinvestment has been included in the figures shown above.
**Capital At Risk. Past performance is not a reliable indicator of future results.
Outcomes Table – Investor Risk
| Risk Category | Tranche Segment | Tranche Segment Description | Number of Loans | Expected Default Rate (PD) | Actual Default Rate | Loss Given Default | Expected Loss* |
|---|---|---|---|---|---|---|---|
| A+ | Senior A (RSP) | Loans to highly experienced or successful repeat Relendex borrowers within the Relendex Select Portfolio. Secured by a first ranking charge at low loan-to-value levels. Compared to other categories, these loans have the highest likelihood of full capital repayment if the borrower defaults, although losses are still possible in adverse conditions. | 11 | 8.33% | 8.33% | 1% | 0.04% |
| A | Senior A | Loans secured by a first-ranking charge at low loan-to-value levels, made to borrowers outside the Relendex Select Portfolio. These loans carry slightly higher risk than A+ loans due to borrower profile, but investors still have a strong likelihood of capital repayment if the loan defaults. | 15 | 8.33% | 8.33% | 2% | 0.08% |
| B | Senior B | Loans secured by a first-ranking charge at higher loan-to-value levels. There is less protection if property values fall, meaning investors face a higher risk of partial capital loss compared to lower-risk categories. | 25 | 8.33% | 8.33% | 10% | 0.42% |
| B | Senior C | Loans secured by a first-ranking charge, but with less headroom between the loan amount and property value. In a default, there is a material risk that not all capital will be repaid, at the upper end of the LTV range for this category particularly if property values decline or delays occur. | 8 | 8.33% | 8.33% | 20% | 0.83% |
| C | Mezzanine | Loans secured by a second-ranking charge, repaid after all the amounts due under the senior loan. In a default scenario, investors are least likely to recover their full investment, especially if property values fall or enforcement costs are high. | 10 | 8.33% | 8.33% | 50% | 2.08% |
*Capital At Risk. Past performance is not a reliable indicator of future results.