Reserve Payments
Reserve Payments are specified in the Reserve Agreement executed by Anzen, the Approved Eligible Transaction's borrower or investors, the Eligible Sponsor and the independent 3rd party verification agent.
The Reserve Payment schedule found in all Reserve Agreements must be approved by veANZ holders. Updates to Reserve Payment schedules will only be applied to all Reserve Agreements 10 business days following approval by veANZ holders and will not be applied retroactively to prior fully executed Reserve Agreements associated with existing Approved Eligible Transactions.
Reserve Payments will be paid from one of two distinct sources depending on the counterparty to the Reserve Agreement:
- 1.If an Approved Eligible Transaction's borrower is the counterparty to the Reserve Agreement, the Reserve Payment will be collected from the priority waterfall, alongside fees and expenses owed to third parties
- 2.If an Approved Eligible Transaction's investor is the counterparty to the Reserve Agreement, the Reserve Payment will be collected from the investor's payments of interest and/or principal and the investor will receive the net distribution.
Under both payment instances above, the Eligible Sponsor is responsible for ensuring the payment is properly transferred to Anzen treasury through any payments methods necessary as per the Reserve Agreement.
The coverage limit available to any Approved Eligible Transaction is limited by Anzen TVL at the time of Reserve Agreement execution (Single Exposure Limit). Under no circumstances can the Reserve Agreement specify a coverage limit that, when applied to the principal amount of the Approved Eligible Transaction, is greater than or equal to 50% of Anzen TVL at the time of Reserve Agreement execution. All Reserve Agreements will include a metric detailing any given Approved Eligible Transaction's exposure relative to Anzen's TVL at the time of Reserve Agreement Execution to ensure compliance with the Single Exposure Limit. The Single Exposure Limit can only be approved and modified by veANZ holders.
Coverage Limit % | Reserve Payment |
|---|---|
0.01 - 10.00% | 10% of Approved Eligible Transaction's Interest Rate |
10.01 - 20.00% | 12% of Approved Eligible Transaction's Interest Rate |
20.01 - 30.00% | 14% of Approved Eligible Transaction's Interest Rate |
30.01 - 40.00% | 16% of Approved Eligible Transaction's Interest Rate |
40.01 - 50.00% | 18% of Approved Eligible Transaction's Interest Rate |
50.01 - 60.00% | 20% of Approved Eligible Transaction's Interest Rate |
60.01 - 70.00% | 25% of Approved Eligible Transaction's Interest Rate |
70.01 - 80.00% | 30% of Approved Eligible Transaction's Interest Rate |
80.01 - 90.00% | 35% of Approved Eligible Transaction's Interest Rate |
90.01 - 100.00% | 40% of Approved Eligible Transaction's Interest Rate |
The above Reserve Payment Schedule is only valid for Agreements with 10% Initial Loss Amount, and 2.5% Single Asset Coverage Limit (for notes that have multiple underlying assets subject to default). This Reserve Payment Schedule is published for informational purposes and is not intended to represent a schedule that applies to every Reserve Agreement. Note that Reserve Payment Schedules are sponsor and asset dependent, and subject to change from time to time.