• Filing Date: 2020-07-09
  • Form Type: 10-Q
  • Description: Quarterly report
v3.20.2
Investment in Limited Partnership (Tables)
6 Months Ended
May 31, 2020
Investments in and Advances to Affiliates [Abstract]  
Schedule of Funds in the Premium/Expense Reserve Account
Funds in the premium/expense reserve account shall be used or otherwise distributed in the following order of priority (in
thousands):

Premium/Expense Reserve Account
 
Three Months Ended May 31, 2020
 
Six Months Ended May 31, 2020
 
 
 
 
Amount
 
Amount
 
Use of Proceeds
First
 
$
26,726

 
$
50,952

 
Premiums, Expenses and Manager Fees
Second
 
2,000

 
4,000

 
Minimum Class B Interest Monthly Distribution - after three years, Class D Returns takes priority until paid in full
Third
 

 

 
Minimum Class B Interest Monthly Distribution
Fourth
 

 

 
Retained for Premium/Expense to Cover Three Months of Transactions, excess to be sent to the Collection Account
 
 
$
28,726

 
$
54,952

 
 
Schedule of Reconciliation of Premium/Expense Reserve Account
The below is a reconciliation of the premium/expense reserve account for the three months and six months ended May 31, 2020 (in thousands).

 
 
Three Months Ended May 31, 2020
 
Six Months Ended May 31, 2020
Beginning balance
 
$
4,836

 
$
4,195

 
 
 
 
 
Distributions received
 
 
 
 
Collections account
 
46,114

 
72,981

Total distribution received
 
$
46,114

 
$
72,981

 
 
 
 
 
Less Payments:
 
 
 
 
Premiums and expenses
 
26,726

 
50,952

Class B monthly distribution
 
2,000

 
4,000

Total payments
 
$
28,726

 
$
54,952

 
 
 
 
 
Balance at May 31, 2020
 
$
22,224

 
$
22,224

 
 
 
 
 

Schedule of Funds on Deposit in the Collections Account and Distributions by the Paying Agent
On each Distribution Date, funds on deposit in the Collections Account shall be distributed by the Paying Agent ("Wilmington Trust, N.A") pursuant to the Waterfall Notice in the following order of priority:

Collection Account
 
Three Months Ended May 31, 2020
 
Six Months Ended May 31, 2020
 
 
Priority
 
Amount
 
 
 
Use of Proceeds
First
 
$
46,114

 
$
72,981

 
Premium/Expense Reserve Account - to cover next three months of premiums and expense
Second
 
9,969

 
9,969

 
Class A Minimum Return Cumulative Amount*
Third
 

 

 
Minimum Class B Interest Monthly Distribution
Fourth
 

 

 
Re-balancing the Total Return Distributions with 72.5% to the Class A Limited Partner and 27.5% to Class B Limited Partner
Fifth
 

 

 
72.5% to the Class A Limited Partner and 27.5% to the Class B Limited Partner
 
 
$
56,083

 
$
82,950

 
 

*Second - To pay the Class A Limited Partner the amount necessary such that the Class A Limited Partner shall have received the Class A Minimum Return Cumulative Amount (applied first which is 11%), second to the amounts necessary to reduce the principal balance from $406.0 million on the Effective Date to April 2039 when it is expected to be paid in full (the A&R LPA stipulate the expected monthly reduction in target principal commencing in April 2021), third to later contributions by the Class A Limited Partner, excluding Advance Facility but includes funded into premium/expense account on its own behalf and fourth the Class D Return, in each case of the definition of Class A Minimum Return Cumulative Amount as of the last day of the month immediately prior to such Distribution Date.
Schedule of Funds Received And Distributions From Collection Account
The below is a reconciliation of funds received in and distributed from the collection account for the three months ended May 31, 2020 and six months ended May 31, 2020 (in thousands).
 
 
Three Months Ended May 31, 2020
 
Six Months Ended May 31, 2020
Beginning balance
 
$
19,411

 
$
13,007

Maturity proceeds received - face
 
42,100

 
75,226

Proceeds received - other*
 
215

 
360

Total receipts
 
61,726

 
88,593

 
 
 
 
 
Less distribution
 
 
 
 
Premium/expense account
 
46,114

 
72,981

Class A
 
9,969

 
9,969

Total distributions
 
56,083

 
82,950

 
 
 
 
 
Balance at May 31, 2020
 
$
5,643

 
$
5,643

 
 
 
 
 

*Includes refund of premiums and interest earned on maturity proceeds
Schedule Reconciliation For Receivable For Maturity of Life Settlement
The below is a reconciliation of receivable for maturity of life settlement held by the limited partnership for the three months and six months ended May 31, 2020 (in thousands).

 
 
Three Months Ended May 31, 2020
 
Six Months Ended May 31, 2020
Balance at start
 
$
27,500

 
$
13,726

Maturities
 
43,150

 
90,050

Less: proceeds received
 
42,100

 
75,226

Receivable at May 31, 2020
 
$
28,550

 
$
28,550

Schedule of Life Settlements
The weighted average life expectancy calculated based on death benefit of insureds in the policies owned by the Company at November 30, 2019 was 11.4 years.

Remaining Life Expectancy (In Years)*
Number of Life Settlement Contracts
 
Fair Value
 
Face Value
0-1

 
$

 
$

1-2

 

 

2-3

 

 

3-4

 

 

4-5

 

 

Thereafter
2

 
1,297

 
12,000

Total
2

 
$
1,297

 
$
12,000

At May 31, 2020, there were 513 policies in the White Eagle portfolio with death benefits of approximately $2.4 billion and the weighted average remaining life expectancy calculated based on death benefit of the insureds in the policies was 6.7 years.

Remaining Life Expectancy (In Years)*
Number of Life Settlement Contracts
 
Face Value
0-1
9

 
$
40,445

1-2
25

 
93,167

2-3
33

 
134,785

3-4
58

 
293,448

4-5
50

 
219,114

Thereafter
338

 
1,629,417

Total
513

 
$
2,410,376


*Based on remaining life expectancy at May 31, 2020, as derived from reports of third party life expectancy providers, and does not indicate the timing of expected death benefits.

Schedule of Estimated Premiums to be Paid on Life Insurance Policies
Estimated premiums to be paid for each of the five succeeding fiscal years and thereafter to keep the life insurance policies in force as of May 31, 2020, are as follows (in thousands):

Year
Expected Premiums

2020
$
51,399

2021
103,815

2022
99,449

2023
93,168

2024
87,883

Thereafter
570,730

 
$
1,006,444