Fergus Capital, LLC
Fergus Capital, LLC (“Fergus”) has established a special purpose vehicle (“SPV”) to issue Notes to investors to fund the acquisition, and/or issuance of loans to borrowers for the purchase of used automobiles in the United States (Fergus and SPV, collectively, “Fergus”). Fergus will diversify investments over a variety of factors, such as individual borrowers, maximum loan, individual credit history scrutiny and other proprietary measures. Fergus’ approach to managing the loans offers a competitive advantage for investors seeking predictable returns, even as fixed income assets struggle in a low-yield environment. An investment in these Notes can also satisfy the need for investment options that can achieve higher yields and help reduce volatility in an investment portfolio. Auto financing has demonstrated the ability to deliver predictable, consistent returns, even in a time of extreme volatility in other markets.
Fergus is seeking to finance automobiles for borrowers with less than prime credit histories. While lending to this type of borrower has existed for many years the market is still developing as the nature and the needs of the clientele evolves. Payment delinquencies and loans ending in repossession are at the lowest levels in recent history and have thus propelled this asset class into favor with institutions world-wide. In fact, a recent study performed by Experian which monitored over 700 million vehicles in North American states that while credit scores continue to fall, the rate of car loans delinquent 30 days as of April 2014 has fallen to 1.11% which is the lowest since 2006. Additionally the study goes on to state that the percentage of loans ending in repossession has fallen to a record low of .38% for the same period. With the economic downturn in recent years, the popularity of this type of financing has begun to come into favor. An increased demand has developed among borrowers whose credit scores have suffered as a result of a weak job market or devalued real estate. Non-traditional auto loans have become increasingly more popular among institutional investors worldwide. The simplistic nature of the asset class coupled with stable returns and lack of correlation to other asset classes has made this finance strategy a natural fit for investors. Fergus seeks to reduce the default and repossession rate on loans through our “hands-on” approach to tracking and monitoring the borrowers, as well as entertaining all options to make the payment process as easy as possible. At the time the borrower purchases the vehicle, the payment schedule is set-up to coordinate with his/her pay frequency. For example, if the borrower is paid on a bi-weekly basis then the payment dates are scheduled for the same day as the borrowers pay day. In addition to structuring convenient payment schedules, management may require the vehicle be equipped with a GPS tracking device that enables our service team to know the whereabouts of the vehicle should repossession be needed. The lack of clientele mobility in some very rural areas coupled with satisfactory payment history may not warrant this type of extensive vehicle monitoring.
Address: 1105 North Market Street, Suite 1300, Wilmington, Delaware 19801, USA
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