The annual product maintenance solved differently (not via the yield spread)
Problem:
"Regarding the G2 product maintenance of CHF 1k & VAT, you have the choice to include this in the yield spread (with only CHF 75k subscription way too much!!) or to handle it via a brief clause in the final loan agreement. I talked shortly with Toni from G2 and in your case you could hold back the remaining four years of G2 product maintenance as a retainer on the initial subscription amount (first year was already paid with the initial invoice). So the borrower gets wired CHF 75k minus (4x CHF 1k & VAT). The retainer cash proceeds remains in the issuer account of Abalone at ISP (like the 40bps yield spread)."
Solution on the Loan Agreement:
With regard to Article 1 - Loan, you should insert as in the example:
The costs of the Loan of CHF 4'000 & VAT (plus additional money transfer fees) of the Loan Amount are to be paid from the Borrower to the Lender which will be deducted from the Loan Amount. Therefore CHF 70'542.- will be transferred to the Borrower whereas the Repayment Amount of the Loan Amount is CHF 75'000.- and also the Interest Rate is applicable on the Loan Amount.
Calculation - FYI:
CHF 70'542.- (= CHF 75'000 - CHF 4000 G2 product maintenance - CHF 308 VAT - CHF 150 for two money transfers)
1x ISP cash transfer is to the borrower.
1x ISP cash transfer from the ABL1 issuer account to Abalone (4yrs G2 product maintenance & VAT)
@Milo Guastamacchia According to Toni, the G2 product maintenance charged will be invoiced to Abalone. While you have the same amount parked in your ABL1 issuer account with ISP. It is up to Abalone how you do this cash management. Normally you would transfer the CHF 4k & VAT to Abalone, which is why the transfer fee is included above.
Last but not least:
The agreed management fee still has to be added to the loan agreement yield, which finally locks in our running margin.