ApplePie Increases Investor Protections with ApplePie Trust

Dec 12, 2016

ApplePie is pleased to announce the creation of ApplePie Trust, a Delaware statutory trust that serves as the new issuer of our franchise loan notes.

This trust structure is specifically designed to enhance investor protections and is modeled on structures used by other online lenders and publicly-registered companies. Bankers Trust Company, which has provided trust-related services since 1917, will serve as the indenture trustee.

Key Benefits for Investors

  • Indenture Trustee: ApplePie Trust has entered into an indenture with Bankers Trust Company, which will act as an independent, third-party representative of noteholders. Borrower payments will be directed into a separate collection account that is controlled by Bankers Trust Company, which also serves as the paying agent to ensure continuous payment activities.
  • Successor Servicer: The trust structure defines all of the activities necessary to ensure that noteholders receive payments, even in the unlikely event that ApplePie Capital is unable to process payments. To that end we have arranged for Portfolio Financial Servicing Company to act as successor servicer, which will help ensure continuity of key loan servicing functions.
  • Separation of Risk:ApplePie Trust has been structured as a “bankruptcy remote” special purpose entity. This structure is designed to protect payments that are due to noteholders in the unlikely event of a bankruptcy of our parent company ApplePie Capital, Inc.

With the ApplePie Trust live, all new franchise loan notes will be issued from ApplePie Trust and will include the protections outlined above.

In addition, all outstanding borrower payment dependent notes will be reissued by ApplePie Trust, ensuring these investments benefit from the new enhanced security benefits. The terms of the ApplePie Trust Notes are the same as the notes that they are replacing.

Overall, we think you’ll agree that ApplePie Trust significantly enhances your legal protections.

If you have questions or feedback, we’d love to hear from you! Please contact our Investor Services Group at [email protected] or 1-800-720-0241 for more information.