To determine the Repurchase Price required to be paid by the Originator if they wish to buy back an ENOR sold with an Originator’s Repurchase Option of x% for Y years, you can use the compound interest formula. This formula is expressed as: A = P × (1 + x)^n + T, where:
A represents the Repurchase Price after n years.
P denotes the purchase price, i.e., the initial price at which the ENOR was sold.
x signifies the annual increase rate, expressed as a decimal (e.g., 5% as 0.05).
n indicates the number of years elapsed from the sale date of the ENOR to the Repurchase date. If the Originator is repurchasing the ENOR at the end of the validity period, then n equals Y.
T indicates the transaction fee that EdenMountain charges. It is equal to 10% of P × (1 + x)^n.
For instance, if an ENOR was sold at $10,000 with an Originator’s Repurchase Option of 5% for 10 years, and you wish to calculate the Repurchase Price after 3 years from the transaction date, the formula would be: A = 10,000 × (1 + 0.05)^3 + 10% = 12,733.875.
For definitions of terms used on the Platform, please refer to the
Platform Terms and Conditions and
Transfer Agreement between Seller and Buyer, and all other applicable legal documents.
Should you have any questions regarding the calculation or require further details regarding the Originator’s Repurchase Option, feel free to contact us
here. We are happy to assist you.