EFTA01356766.pdf

Reporting Financial Statements - 45 Days after Quarter End Covenants Audited Financial Statements - 90 Days after Quarter End TBD Reporting covenants on Guarantor 7. Client details Navarro Relationship Overview: • Joanne Jensen has known Ben Navarro since 1993, when she worked for him on the Institutional Fixed Income Sales desk at Citi • In 2008, Joanne provided Ben with $440MM for the acquisition MGIC and Radian's interest in Sherman • In 2013, Joanne introduce Ben to DB WM client Jules Kroll as a potential investor in Kroll Bond Rating Agency (KBRA). Ben acquired a 10% interest in the company. In 2015, Deutsche Bank advised Kroll on the sale of his remaining stake in KBRA, which Ben acquired for $320MM. Client Background: • Ben Navarro is the Founder and CEO of Sherman Financial Group ("SFG"). • Prior to SFG, he was the Co-Head of Mortgage Sales and Trading for Citicorp, with responsibility for the firm's purchases, securitizations, and sales of residential mortgages to institutional clients • Top 10 salesperson on Wall Street, focused on credit-sensitive assets • Navarro spent three years with Goldman Sachs on the Whole Loan and Agency MBS desks • Started his career at Chemical Bank, where he completed the credit-training program and spent two years issuing loans to mortgage banks and thrifts • Active philanthropist, establishing a S90MM foundation for education related endeavours • Prominent member of the Charleston community, funding three schools in the area and residing on the board of the Medical University of South Carolina Sherman Financial Group: • The nation's largest privately held consumer finance company, generating over $2B in revenue in 2017 • Major underlying companies are: Credit One Bank, Resurgent Capital Services, Kroll Bond Rating Agency, and a small Real Estate business (not included in this transaction): Credit One Bank: • OCC-regulated national bank, issues and services near-prime credit cards, operates under a CEBA charter (no bank holding company treatment) • 'Highly (OCC) rated institution" with no Matters Requiring Attention (MRA)s in the past 8 years • Credit One has been extraordinarily successful, generating $956.9MM pre-tax earnings in 2017 and an estimated $1.1B and $1.2B in 2018 and 2019, respectively. JP Morgan recently valued them at $1.1B. • 91b largest MasterCardNisa issuer, with over 9 million customers, portfolio totalling approximately $5.8B • The Bank exclusively originates and services the portfolio, then sells it at par to a SPV under Sherrnan's ownership • The company employs low leverage, with a Debt/Equity of 2.1x, which is below 2.4x of comparable public companies Resurgent Capital Partners • Resurgent is a CFPB-regulated purchaser of distressed consumer debt. They have spent $5.8B purchasing over $280B of distressed consumer debt, and have generated cash recoveries of 512.68. • In 2017, Resurgent saw revenues of $515MM and pre-tax eamings of S109MM For internal use only CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0042815 CONFIDENTIAL SDNY_GM_00188999 EFTA01356766