Available type of investments
Asset-backed securities
Securities are financial instruments that are backed by underlying loans issued to the borrower, who may be a consumer or a business. The return on the Securities is a fixed interest rate and is applied to the amount invested by the investor that amortizes over the lifetime as the underlying loans are being repaid. Detailed information on the Securities is available in the Base Prospectus, Key Information Document and Final Terms.
Consider risks before deciding to invest
Investing always involves undertaking risks. Investors should carefully consider the risks related to the Securities described below and the other information contained in the Base Prospectus of the specific loan originator before deciding to invest. Even though TWINO strives to do the best possible risk management, investors should be aware that the value of their investments could decline due to any of these risks, and Investors may lose (a part of) their investment.
Investors should, among other things, consider the risks related to the Securities and the trading market:
Risks associated with investing
Repayment risk
Securities are backed by the underlying loan portfolio. By investing in Securities the investor is subject to the risk of credit default which may result in full or partial loss of the invested principal amount. Should the loan originator become insolvent, the investors have the right to receive the payment of the outstanding principal amount of the Securities and the interest accrued according to the relevant laws governing the insolvency process.
Liquidity risk
TWINO does not guarantee the minimum liquidity of the invested amount prior to the initially agreed term has expired. Investors should take into account that there may be difficulties in selling Securities in the secondary market, which might lead to selling at a discount to liquidate the funds. Discount rate and premium are capped to a maximum of 29.9% (for discount) and 4.9% (for premium) change from the nominal value.
Price risk
Investments are repaid for their nominal value, yet the fair value of the Security might significantly differ from its nominal value as the price of the investment in the secondary market may fluctuate.
Tax risk
Tax rates and tax payment procedures applicable at the moment of purchase of Securities to the tax residents, non-residents of Latvia, and residents of other countries may change. TWINO does not compensate for the increase in taxes to investors.
Geographical and regulatory risk
The Loan Originator’s operations are subject to regulation by a variety of consumer protection, financial services and other state authorities, including, but not limited to, laws and regulations relating to the provision of payment services, consumer crediting and consumer rights protection, debt collection, and personal data processing. Failure to comply with existing laws and regulations applicable to the Loan Originator’s operations, or to obtain and comply with all authorizations and permits required for its operations, or adverse findings of governmental inspections, may result in the imposition of material fines or penalties or more severe sanctions, including preventing the Loan Originator from continuing substantial parts of its business activities, suspension or revocation of the licenses, or in criminal penalties being imposed on the officers.
Operational risk
TWINO faces and manages operational risk which summarizes the uncertainties that day-to-day business activities bring. This risk can result from breakdowns in internal procedures, people and systems. Operational risk is managed with help of well-developed internal processes and procedures ensuring the risk is managed accordingly in a timely manner, including risk identification, measuring and evaluation, risk monitoring, and control, risk reporting as well as actions taken for risk mitigation, avoidance, or acceptance. The main risk factors are dependency on third-party providers and information technology systems as well as legal risks that should be considered in particular.
Legal Risks
TWINO operates under strict supervision and must comply with a wide range of financial, securities, and data protection regulations, including GDPR. Non-compliance may result in fines, penalties, or restrictions on operations. Changes in laws or interpretations can increase costs and require adjustments to business practices, potentially impacting financial results.
Risks related to macroeconomic developments
The Loan Originator’s performance depends on the broader economic situation in Poland. Factors such as inflation, unemployment, and consumer purchasing power can affect customer solvency and loan repayments. An economic downturn may increase defaults, impact financial partners, and reduce the value of securities or access to financing, which could negatively influence business results.
Third Parties Related Risks
TWINO’s operations depend on various third parties- including Loan Originators, Issuers, Distributors, Lenders, IT service providers, banks, and debt collection agencies. Any disruption, failure, or non-compliance by these partners could impact service quality, increase costs, or negatively affect business performance.
Risk Management
Risk Management is an integral part of the overall management processes at TWINO. The main objective of risk management is to ensure effective overall risk mitigation. TWINO Risk management strategy is consistent with all TWINO's business activities. For more detailed information on the financial instrument and risks associated with investing, as well as how TWINO manages the risks, please see the Base Prospectus of the respective loan originator.