Consumer loans, undisclosed

In June 2006, Proventus extended a dated subordinated loan to a fast growing financing company in Sweden. The company offers unsecured loans to households in Scandinavia and has seen rapid growth over the last few years. As the operating company is required to maintain a capital adequacy ratio, the growth would eventually have forced the owners to invite external capital or sell part of the portfolio. Instead, Proventus provided a SEK 50 million subordinated loan that was structured to be included in the capital base. The down-side protection is provided by safeguards in terms of financial covenants.

Proventus has in the past few years moved to meet what we believe to be an important, unfilled need among mid-sized European companies that are in expansion or restructuring, but are unable to acquire bank financing and unwilling to dilute current ownership to fund such initiatives. In August 2009, Proventus laid the ground for Proventus Capital Partners, a co-investment vehicle through which Proventus invests its own and external funds in public corporate bonds, leveraged loans and private corporate loans to mid-sized companies in need for growth and restructuring capital. We see this as a major investment opportunity, targeting capital needs that cannot currently be financed because of restrictive loan policies of banks and others. We think there is a significant need for a more active market of this kind and aim to take part in developing it.