This is a follow-up update regarding the Nera litigation-funding portfolio on Mintos.
For background information about the payment delays, the structure of the Notes, the buyback process, the ongoing SRA review, and previous developments regarding the underlying claims, please refer to our earlier updates, including our most recent update from June 15, 2026.
Since our last communication, discussions regarding potential solutions to the current payment delays have progressed further, and the parties are now working towards finalising a restructuring framework.
As this work is still ongoing, we are not yet in a position to disclose specific terms; further details will be shared once the relevant documentation has been completed. No principal repayments have been received since our previous update.
As for the Solicitors Regulation Authority (SRA) review, there have been no material developments since our previous update.
We believe restructuring will create a pathway to recoveries for investors. We remain engaged with all relevant parties and will continue to provide updates as further developments occur.
Frequently asked investor questions
1. How has Nera been able to service interest payments until now if no cases have been resolved?
Since the Notes were issued, Nera Capital Funding 2 DAC has been required to maintain a cash reserve at the Lending Company level. Interest payments to investors to date have been serviced primarily from that reserve, alongside other cash flows available at the Lending Company. The current delay reflects the fact that, with the underlying case resolutions taking longer than originally expected, the reserve and incoming cash flows are no longer sufficient to cover scheduled payments on the original timeline.
2. Why aren't the Notes simply extended?
The Notes' contractual terms don't allow Mintos or the Lending Company to unilaterally extend the maturity. Any change to the payment schedule has to go through a formal restructuring, which is precisely what is currently being negotiated with the Lending Company and the senior lender group. In economic terms, the structure under discussion is expected to function similarly to an extension (re-profiling payments over a longer horizon to align with the timing of case resolutions) while staying within the legal framework of the Notes.
3. Why is accrued and pending interest being recorded inconsistently across note series?
It helps to separate what investors are contractually entitled to under the Notes from how it is currently being shown on the platform.
What is owed (governed by the Notes' terms):
- Principal that has not been repaid, and
- Scheduled interest accrued up to the point the borrower stopped paying.
Once the 60-day borrower delay window elapses, the unpaid principal moves into Pending Payments status, and Pending Payment Interest is calculated by Mintos on that pending principal from that point onward until it is repaid.
Why different series can look different on the platform right now. Series are at different points in the same two-phase logic:
- Series whose 60-day window has already elapsed have moved into Pending Payments and are accruing Pending Payment Interest.
- Series still inside the 60-day window are not yet in Pending Payments status.
Series at or near maturity behave differently again, because the way scheduled interest dates interact with the maturity date and with the transition into Pending Payments has produced display variations, for example, certain matured series being split between "outstanding principal" and "pending," and certain June-expiry series not yet appearing as overdue.
What we are doing: We have identified these inconsistencies and are working on a fix so that the platform view aligns with the position above. Investors' contractual entitlements under the Notes are governed by the Notes' terms and are not affected by how the dashboard currently presents them.
4. What does ATE insurance cover, and what doesn't it cover?
After-the-Event (ATE) insurance covers two specific things at the case level: disbursements (such as court fees and expert report fees) and the opposing party's legal costs in the event that a case proceeds to trial and is lost. It does not cover risks outside the trial process itself — for example, it does not respond to law firm insolvency, regulatory intervention by the SRA, or other operational risks at the borrower level.
Mintos verifies that ATE coverage is in place at case level through the documentation provided by the Lending Company as part of standard reporting on the loan book.
5. Why is Nera still paying interest on another platform but not on Mintos?
The exposures on the two platforms relate to different legal cases in different countries, with different payment schedules and underlying borrower structures. The two portfolios are not the same set of receivables, so the cash flow status on one platform does not directly indicate the position on the other.
6. How concentrated is the Nera loan book at single-borrower level?
We are not in a position to disclose borrower-level details, including the identity or relative size of individual law firm exposures within the Nera loan book. This is consistent with our standard practice across all Lending Companies on the platform and reflects the confidentiality commitments that apply to counterparty information.
The focus from our side is on the structural protections that apply at the Lending Company level: the buyback obligation, ATE coverage on the case pool, and the security position under the Notes, which are designed to operate independently of the specific borrower mix at any point in time.
7. Does the buyback obligation apply, and when does it take effect?
Yes. The buyback obligation applies if a payment from the underlying borrower remains overdue for more than 60 days. After this 60-day period, Nera Capital Funding 2 DAC is required to repurchase the affected loans, and the amount moves to Pending Payments status on Mintos. From that point, Mintos-calculated Pending Payment Interest starts to accrue on the delayed amount. It is important to note that no late interest accrues during the initial 60-day overdue period. This is because the agreement with Nera Capital Funding 2 DAC does not provide for late interest before the buyback obligation is triggered. Other Lending Companies on Mintos may have different arrangements.
It is also important to understand that the buyback obligation does not mean that cash is immediately available for repayment. In the current circumstances, the underlying claims have not yet been resolved, and Nera Capital Funding 2 DAC may not have sufficient cash flows to make buyback payments until funds are received from the underlying recovery process.
In simple terms, the buyback obligation is triggered after 60 days of delay in repayment, and Pending Payment Interest begins to accrue, but actual repayment depends on when Nera Capital Funding 2 DAC receives recoveries from the underlying claims.
8. What is causing the delay in resolving the underlying claims?
The recovery process has been affected by an ongoing legal case that is expected to clarify whether certain consumer claims can be pursued collectively rather than individually.
A collective approach could make the claims process more efficient and reduce associated costs. While this legal matter is being resolved, progress on some individual claims has been slower than initially anticipated.
Based on current information, further clarity may emerge by the end of summer or during autumn 2026. However, the timeline depends on legal and regulatory processes that are outside the parties' control.
9. Can Nera Ltd use cash flows from non-UK operations to service obligations on Mintos?
No. Nera Capital Ltd has no contractual obligation to support Nera Capital Funding 2 DAC. Its role is to manage the underlying claims and recovery process, rather than to guarantee repayments.
10. Is SRA review a temporary administrative issue or a more serious concern?
Any review by an authority shall be taken seriously. We have been informed that the review is part of an industry-wide solvency review of legal firms, not any other wrongdoing. Nevertheless, it is up to the SRA to make its conclusion and potential resolution of the review.
11. Other litigation funders have said they are not affected by the SRA review. How can it be industry-wide?
The SRA review covers a defined set of UK law firms with high-volume consumer-claim caseloads, not the litigation finance sector as a whole. Other funders whose lending model or borrower base is different may not be affected. Our update reflects the situation specifically for the law firms funded through Nera Notes.
12. Is the SRA investigation limited to UK loans?
Yes. Based on current information, the regulatory review is limited to UK-related lending and litigation funding activities.
13. When will payments resume?
There is currently no defined timeline for payment resumption. Resumption of payments depends on the regulatory review being concluded and normal servicing being restored. This timing is uncertain.
14. Will principal not due yet be repaid on time when Notes mature?
Based on information provided by Nera Capital and the nature of litigation funding assets, there is a material likelihood that case resolutions will extend beyond original Nera Note maturities. This is a known structural characteristic of litigation finance, where recovery timing is dependent on court processes, settlements, and enforcement actions.
As a result, principal repayment at maturity cannot be guaranteed in the current circumstances and most likely will be delayed.
15. Can Nera Notes on Mintos be sold on the Secondary Market?
Yes. Investors can list and trade eligible Notes, i.e., Notes that are not in Pending Payments or overdue, on the Secondary Market, subject to standard platform liquidity and demand conditions.
16. Why is the overdue amount increasing?
Because scheduled repayments are currently not being received on time, amounts that would normally be repaid to investors remain outstanding and accumulate as overdue payments.
17. Do the missed payments mean the investments are lost?
No, currently, such a conclusion cannot be drawn. The delays to Note holders reflect delayed expected cash flows from the resolution of underlying claims and SRA review.
18. Is interest still being calculated on delayed payments?
Interest is not accrued during the initial borrower payment delay period of up to 60 days. Once the 60-day period elapses, the buyback obligation is triggered, and the loans move to Pending Payments status. From that point, interest on the delayed amount (Pending Payment Interest) starts accruing in accordance with the applicable agreements and remains payable together with the outstanding amount.
Final note
We understand that uncertainty and limited visibility can be frustrating, especially in an asset class where timing is inherently linked to legal and regulatory processes.
We will continue to work on the situation closely and provide updates as soon as new, substantial information becomes available or, at a minimum, every two weeks, even if there is nothing material to report. We will also post each update in the community thread.
For transparency and consistency, we will avoid speculation and focus on confirmed developments as they arise.