An Australian wealth management platform, iPartners, has appointed receivers to two investment trusts holding loans originated by private credit lender Marketlend, after the investment vehicles defaulted.
iPartners holds Class A notes from the trusts collectively worth A$81.7mn (US$57.8mn), according to an April 7 judgment from a Sydney court approving the appointment of receivers.
Beginning in June last year, there were “multiple instances of underpayments and non-payments of interest”, iPartners told the court. The firm declared the trusts in default in February after interest payments from the trusts stopped entirely.
iPartners said it is owed almost A$3.9mn in unpaid interest as of February.
Marketlend specialises in providing investors access to SME loans in Australia and the broader Apac region and has been a lender in the commodity trading sector.
The loans sold to the trusts by Marketlend were largely revolving credit lines that benefitted from an Australian government guarantee scheme designed to help small businesses recover from the Covid-19 pandemic, according to a person familiar with the trusts.
Marketlend was removed as servicer of the trusts in December, a court document showed. Tyndall Capital, which iPartners described as Marketlend’s parent company, was removed as the trust manager at the same time.
In February, iPartners told clients it had faced “significant obstacles in rebuilding loan book records and validating borrower payment histories”, the Australian Financial Review reported, citing a company document.
McGrathNicol was appointed as receivers over the collateral in the two trusts in mid-March, according to a New South Wales Supreme Court judgment. The court issued an order deeming the appointment “not invalid” following a request from iPartners.
Marketlend told GTR the company is confident the loans can be recovered and it “continues to pursue all appropriate avenues to ensure repayment in accordance with facility terms”.
“Marketlend has operated for over 10 years as a professional lending platform, having originated and serviced loans in excess of A$1.2bn,” a company spokesperson said. “It has not previously been subject to allegations of the nature suggested by iPartners.”
The company manages and services 22 other trusts, the spokesperson said, adding: “We continue to operate our broader lending business in the ordinary course, including continuing to raise new capital from investors while also addressing the matters relating to the iPartners-associated trusts.”
Approached by GTR, iPartners said: “Because this matter is subject to enforcement action, we cannot comment further at this stage.”
The Australian loan guarantee scheme under which the facilities in the trusts were provided had a limit of A$5mn and capped fixed interest rates at 7.5%. The government provided an 80% guarantee between April and December 2021, and 50% cover from January to June 2022.
Marketlend previously filed a raft of cases against insurer Bond & Credit Company, other insurers and counterparties to its small-ticket commodity trading borrowers, following a rash of insolvencies and non-payment in the sector in 2019-20. The firm also acquired claims from other policyholders.
In 2023, Marketlend CEO Leo Tyndall founded his own trade credit insurer, Tyndall Insurance, registered in Labuan, Malaysia.
