Auros Global repaid 100% of funds to M11 Credit pools on Maple

Following our previous update on the Auros Global restructuring case, M11 Credit is delighted and proud to announce that as of November 8, 2023, we have successfully secured the full repayment of the Auros loans. This marks the successful conclusion of a restructuring process, ensuring the return of all funds to Liquidity Providers, including interest.

We express our deep appreciation for the patience of Liquidity Providers in the M11 Credit Permissioned USDC and the M11 Credit wETH pools on Maple Finance, whilst we worked closely with Auros as they restructured. At the time of the restructuring that commenced in November 2022 , the outstanding exposure of Auros towards the M11 Credit Pools totalled 7.5m USDC and 8,400 wETH. To avoid haircuts for Liquidity Providers, M11 Credit negotiated to receive an initial 60% back in February 2023 with the remaining balance to be termed for 9 months.

The challenges Auros encountered were exacerbated by the FTX implosion. A portion of their funds, locked in FTX with an unclear path to recoup, necessitated provisions for potential losses, thereby subsequently weakening Auros’ financial position. The market turmoil and poor business practices of literally all CeFi lenders forced them to recall all their outstanding credit lines. Consequently, amidst the challenges of unwinding trades and conservatively marked-down FTX funds, Auros faced a liquidity crunch. As a result they found themselves unable to satisfy loan recalls and thus -to avoid preferential treatment towards any creditor- decided to halt all loan repayments including the scheduled repayments to the M11 Credit Pools on Maple Finance.

What followed were weeks of negotiations where we did everything we could to protect the interests of Liquidity Providers in the best way. This ultimately led to a creditor agreement where M11 Credit was able to secure a position with full expected recovery of funds.

Following Auros’ successful equity fundraising that further solidified their financial stance, our rigorous due diligence and credit analysis showed Auros’ financial position to be sufficiently improved to meet our stringent underwriting standards and provided more than enough comfort to term out 40% of the outstanding debt (and 60% instantly repaid).
Auros’ equity fundraising has further solidified their financial stance, positioning them for a successful business resurgence.

During the last 9 months, M11 Credit consistently liaised with Auros’s management to discuss their financial position. Over the 9-month period post-restructuring, we physically met multiple times with their new CEO, Marcel Klooss, an Optiver and VivCourt veteran, who joined after a fresh capital injection from Vivienne Court, and our discussions centred on Auros’ business developments. Additionally, we connected with the Auros team at two key 2023 conferences: Ethcc in Paris and Token 2049 in Singapore. On top of these actions, we also made advancements with our in-house on-chain monitoring tool to spot irregular flows of funds as well as to benchmark the financial statements provided by Auros. We are currently testing it further to enhance the transparency of on-chain capital flows.

Our effective collaboration with the Auros team was instrumental in the first successful debt restructuring case on DeFi rails. This achievement has enabled M11 Credit to recover 100% of the funds for capital providers.

Lastly, it is worth emphasizing that restructurings are inherent facets of any credit portfolio. Our credit team, backed by decades of expertise in managing Non-Performing Loans, has consistently demonstrated transparency and professionalism, ensuring mutually beneficial outcomes for creditors and borrowers.