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October lenders offer Italian borrowers a refinancing solution

October is closely monitoring the impact of the COVID-19 crisis on businesses. Today it is difficult to quantify the risk arising from this crisis. In this complex situation, our focus is to help our borrowers preserve and protect their cash in order to defend our lenders’ interests. For this reason, and on top of measures already taken (3-month capital repayment freeze, decision not to charge borrowers their monthly fees), we have now introduced a new risk mitigation initiative: Italian borrowers eligible to a public or private guarantee will be able to benefit from a refinancing solution (loan bigger in amount with an extended duration).

We have asked our lenders to vote on this refinancing operation. The vote closed on April the 9th with 99,78% of the voters (in amount lent) saying yes to our proposal. Again a huge thanks to our lenders community for their participation and your renewed support!

How will the refinancing work?

To the Italian borrowers eligible to a public or private guarantee, October will offer the possibility to repay their current October loan and to obtain a new one. The amount of the new loan will be higher than the current outstanding capital. Also, the loan maturity will be extended.

Borrowers who accept October’s offer will be able to repay their current loan and, thanks to the new loan, will benefit from an increase in liquidity and duration. In order to benefit from the guarantees, the new loan will have to be financed exclusively by the institutional investors of the October Fund.

The eligibility to the guarantees depends of activity sector and turnover criteria.

What are the benefits of this operation?

We believe that this operation benefits all parties involved (private lenders, institutional investors and borrowers) and represents an effective solution for mitigating the risk arising from the current crisis.

  • For retail lenders: all retail lenders who lent to the refinanced projects will receive the immediate repayment of the outstanding capital. Therefore, they will be able to 1/ secure the capital repayment of concerned Italian projects and 2/ to return to liquidity.
  • For institutional investors: with this refinancing operation the October Fund would benefit from a guarantee that partially covers the capital lent. It is a very efficient way to secure the Italian October portfolio during this crisis (although of course less secure than getting repaid immediately, as retail lenders are).
  • For borrowers: this operation allows SMEs to increase their available liquidity and extend the maturity of their repayments.