EX-99.1 CHARTER 3 exhibit99_1.htm

Deloitte & Touche LLP

Suite 400
Harborside Plaza 10

Jersey City, NJ 07311
USA

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www.deloitte.com

Aqua Finance Inc.

One Corporate Drive, Suite 300

Wausau, Wisconsin 54402

Independent Accountants’ Report

on Applying Agreed-Upon Procedures

We have performed the procedures described below, which were agreed to by Aqua Finance Inc. (the “Company”) and KeyBanc Capital Markets Inc. (“KeyBanc” and, together with the Company, the “Specified Parties”) related to their evaluation of certain information with respect to a portfolio of contracts entered into to finance home improvement projects, products and services (the “contracts”) in conjunction with the proposed offering of Aqua Finance Trust 2020-A, Asset Backed Notes, Series 2020-A.

The Company is responsible for the information provided to us, including the information set forth in the Statistical Contract File (as defined herein). The sufficiency of these procedures is solely the responsibility of the Specified Parties of this report. Consequently, we make no representations regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

Agreed-Upon Procedures

On July 24, 2020, representatives of KeyBanc, on behalf of the Company, provided us with contract listings (collectively, the “Contract Listing”) with respect to 27,449 contracts. At your instruction, we randomly selected 150 contracts from the Contract Listing (the “Selected Contracts”).

Further, on July 27, 2020, representatives of KeyBanc, on behalf of the Company, provided us with a computer-generated data file and related record layout containing data, as represented to us by the Company, as of June 30, 2020, with respect to 26,960 contracts including 148 of the 150 Selected Contracts (the “Statistical Contract File”). The remaining 148 Selected Contracts are hereinafter referred to as the (the “Sample Contracts”).

At your instruction, we performed certain comparisons and recomputations for each of the Sample Contracts relating to the contract characteristics (the “Characteristics”) set forth on the Statistical Contract File and indicated below.

Characteristics

1. Contract Number (for informational purposes only)

2. Contract Type (closed-end or revolving)

3. Original contract amount

4. Annual percentage rate

5. Borrower state

6. Borrower city

7. Borrower zip code

8. Interest start date

9. Obligor income at origination

10. Promo code

11. Promo rate #1

12. Promo rate expire date #1

13. Promo rate #2

14. Promo rate expire date#2

15. Initial term (months)

16. Periodic payment

Member of

Deloitte Touche Tohmatsu Limited

We compared Characteristics 2. and 3. to the corresponding information set forth on or derived from the Retail Installment Contract and Security Agreement or the Retail Installment Credit Agreement (collectively, the “Contract”); Characteristic 4. to the Contract or the “Revolving Credit Agreement and Disclosure Statement;” Characteristics 5. through 7. to the Contract or the “Credit Application;” Characteristic 8. to the Contract, “Certificate of Completion” or the “Promotional Credit Plan Addendum;” Characteristic 9. to the Credit Application, a borrower’s pay stub or other related correspondence (collectively, the “Income Verification Documentation”); Characteristic 10. to the “Approval Sheet;” Characteristics 11. through 14. to the Contract or Promotional Credit Plan Addendum; and Characteristic 15. to the Contract or the “Amortization Schedule.”

With respect to Characteristic 16., for Sample Contracts with a contract type (as set forth on the Contract) of (i) “closed-end,” we compared the periodic payment to the corresponding information set forth on the Contract or (ii) “revolving,” we were instructed, by representatives of the Company, to recompute the periodic payment by multiplying (a) the original contract amount and (b) the “payment factor” (each as set forth on the Contract), round the resulting value up to the nearest whole number and compare such rounded value to the corresponding information set forth on the Statistical Contract File.

For the purposes of such comparisons and at your instruction:

with respect to Characteristic 2., a contract type of (i) “X” as derived from the Statistical Contract File is deemed to be in agreement with a contract type of “revolving” as set forth on the Contract and (ii) “S” as derived from the Statistical Contract File is deemed to be in agreement with a contract type of “closed end” as set forth on the Contract;

with respect to Characteristic 3., for the Sample Contracts indicated in Appendix A, we observed a difference with respect to the original contract amount set forth on the Statistical Contract File when compared to the original contract amount set forth on the Contract. For such Sample Contracts, we were instructed to perform an additional procedure and compare the original contract amount set forth on the Statistical Contract File to the original contract amount set forth on the corresponding system screen shot, provided to us by the Company, from the Company’s servicing system (each, a “Servicing System Screen Shot”);

with respect to Characteristic 8., for the Sample Contracts indicated in Appendix B, we observed a difference with respect to the interest start date set forth on the Statistical Contract File when compared to the interest start date set forth on the Certificate of Completion or we were unable to ascertain the interest start date from the Certificate of Completion. For such Sample Contracts, we were instructed to perform an additional procedure and compare the interest start date set forth on the Statistical Contract File to the interest start date set forth on a Servicing System Screen Shot;

with respect to Characteristic 10., a promo code of (i) WR7.99%APR as set forth on the Statistical Contract File is deemed to be in agreement with a promo code of 7.9+1.5% as set forth on the Contract and (ii) W13.99%APR as set forth on the Statistical Contract File is deemed to be in agreement with a promo code of 13.99% as set forth on the Contract;

with respect to our comparison of Characteristics 12. and 14., we did not perform any comparisons for Sample Contracts with a promo rate expiration date #1 or promo rate expiration date #2, as set forth on the Statistical Contract File, greater than the “contract expiration date,” as set forth on the Contract or the Amortization Schedule; and

with respect to our comparison of Characteristic 16., for the Sample Contracts indicated in Appendix C, we observed a difference with respect to the periodic payment as set forth on the Statistical Contract File, when compared to the periodic payment as determined above. For such Sample Contracts, we were instructed to perform an additional procedure and compare the periodic payment as set forth on the Statistical Contract File to the periodic payment as set forth on a Servicing System Screen Shot.

The contract documents described above, including any information obtained from the indicated system, and any other related documents used in support of the Characteristics were provided to us by representatives of the Company and are collectively referred to hereinafter as the “Contract Documents.” We were not requested to perform, and we did not perform, any procedures with respect to the preparation or verification of any of the information set forth on the Contract Documents and we make no representations concerning the accuracy or completeness of any of the information contained therein. In certain instances, our procedures were performed using data imaged facsimiles or photocopies of the Contract Documents. In addition, we make no representations as to whether the Contract Documents are comprehensive or valid instruments or reflect the current prevailing terms with respect to the corresponding Sample Contracts.

Agreed-Upon Procedures’ Findings

The results of the foregoing procedures indicated that the Characteristics set forth on the Statistical Contract File were found to be in agreement with the above-mentioned Contract Documents, except as described in Appendix D. Supplemental information is contained on Appendix E.

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We make no representations as to the (i) actual characteristics or existence of the underlying documents or data comprising the contracts or underlying documentation underlying the Statistical Contract File or the conformity of their characteristics with those assumed for purposes of the procedures described herein, (ii) existence or ownership of the contracts or (iii) reasonableness of any of the aforementioned assumptions, information or methodologies.

It should be understood that we make no representations as to questions of legal interpretation or as to the sufficiency for your purposes of the procedures enumerated in the preceding paragraphs. Also, such procedures would not necessarily reveal any material misstatement of the information referred to above. We have no responsibility to update this report for events and circumstances that occur subsequent to the date of this report.

This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to conduct, and did not conduct, an (i) audit conducted in accordance with generally accepted auditing standards or (ii) examination or a review conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants, the objective of which would be the expression of an opinion or conclusion, respectively, on the accompanying information. Accordingly, we do not express such an opinion or conclusion, or any other form of assurance, including reasonable assurance. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

None of the engagement, procedures or report was intended to address, nor did they address, the (i) conformity of the origination of the assets to stated underwriting or credit extension guidelines, standards, criteria or other requirements, (ii) value of collateral securing such assets or (iii) compliance of the originator of the assets with federal, state, and local laws and regulations.

None of the engagement, procedures or report were intended to satisfy, nor did they satisfy, any criteria for due diligence published by a nationally recognized statistical rating organization.

This report is intended solely for the information and use of the Specified Parties identified above and is not intended to be and should not be used by anyone other than these Specified Parties.

Yours truly

/s/ Deloitte & Touche LLP

August 6, 2020

Appendix A to Independent Accountants’ Report on Applying Agreed-Upon Procedures issued by Deloitte & Touche LLP dated August 6, 2020.

In applying our agreed-upon procedures as outlined above, we performed additional procedures with respect to Characteristic 3. for the following Sample Contracts:

S002627148

S002627368