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title: 'MIP95: $100M of Cogent Bank Loan Participations'
tags: [Summaries]

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tags: Summaries
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# MIP95: $100M of Cogent Bank Loan Participations

This is a summary of the contents of this subproposal and its impact, from GovAlpha's perspective:

- This is a valid MIP eligible to enter the February Governance Cycle.
- If approved, [Cogent Bank](https://cogentbank.com) will participate $100M of loans to MakerDAO’s existing RWA Master Participation Trust using the same Participation Agreement as MakerDAO’s deal with Huntingdon Valley Bank, namely:
    - The Real World Asset(s): 50% participation(s) [pari passu](https://en.wikipedia.org/wiki/Pari_passu) in loans originated by Cogent bank that have been [assigned a “Pass” rating](https://forum.makerdao.com/t/mip95-100m-of-cogent-bank-loan-participations/19338#mip95c28-cogents-risk-rating-credit-rating-system-19) in accordance with a federal regulatory grading framework.
    - An Initial [Debt Ceiling](https://manual.makerdao.com/parameter-index/vault-risk/param-debt-ceiling) of: $100M
    - Minimum Yield (a spread over benchmarks) to the RWA Master Participation Trust at the time of origination and participation (net of all S,G,&R Fees):
      - For floating-rate loans: 75 basis points over the 30-day average [SOFR](https://www.sofrrate.com/) (implying a minimum floating yield of 4.85% as of January 5th, 2023)
      - For fixed-rate loans: 30 basis points over the like-term treasury for fixed rate loans (implying a minimum fixed yield of 4.15% as of January 5th, 2022)
      - The vault stability fee will be set to 0%, but the net interest from the Minimum Yield will be sent to the Surplus Buffer.
      - Eligible Loan Categories are listed [here](https://forum.makerdao.com/t/mip95-100m-of-cogent-bank-loan-participations/19338#mip95c26-loan-categories-makerdao-will-participate-in-16).---
tags: Summaries
---

# MIP95: $100M of Cogent Bank Loan Participations

This is a summary of the contents of this subproposal and its impact, from GovAlpha's perspective:

- This is a valid MIP eligible to enter the February Governance Cycle.
- If approved, [Cogent Bank](https://cogentbank.com) will participate $100M of loans to MakerDAO’s existing RWA Master Participation Trust using the same Participation Agreement as MakerDAO’s deal with Huntingdon Valley Bank, namely:
    - The Real World Asset(s): 50% participation(s) [pari passu](https://en.wikipedia.org/wiki/Pari_passu) in loans originated by Cogent bank that have been [assigned a “Pass” rating](https://forum.makerdao.com/t/mip95-100m-of-cogent-bank-loan-participations/19338#mip95c28-cogents-risk-rating-credit-rating-system-19) in accordance with a federal regulatory grading framework.
    - An Initial [Debt Ceiling](https://manual.makerdao.com/parameter-index/vault-risk/param-debt-ceiling) of: $100M
    - Minimum Yield (a spread over benchmarks) to the RWA Master Participation Trust at the time of origination and participation (net of all S,G,&R Fees):
      - For floating-rate loans: 75 basis points over the 30-day average [SOFR](https://www.sofrrate.com/) (implying a minimum floating yield of 4.85% as of January 5th, 2023)
      - For fixed-rate loans: 30 basis points over the like-term treasury for fixed-rate loans (implying a minimum fixed yield of 4.15% as of January 5th, 2022)
      - The vault stability fee will be set to 0%, but the net interest from the Minimum Yield will be sent to the Surplus Buffer.
      - Eligible Loan Categories are listed [here](https://forum.makerdao.com/t/mip95-100m-of-cogent-bank-loan-participations/19338#mip95c26-loan-categories-makerdao-will-participate-in-16).
- The servicing fee and the fee for governance & reporting (S,G,&R) are:
    - 125bps on the first $10M of each participation.
    - 75bps thereafter.
- Uninvested dollars in the RWA Master Participation Trust will be invested in a short-term treasury money market such as [SDIT Treasury II Fund Class F (SCPXX)](https://seidocs.filepoint.live/assets/pdfs/Summary_Prospectuses/SDIT-TreasuryII-Fund-Summary-ClassF.pdf)
- MakerDAO's legal fees will be covered by Cogent and [MaxStability](https://www.stability.business).
- This proposal has been assigned `High-Impact` based on the methodology listed [here](https://manual.makerdao.com/governance/off-chain/impact-estimations).

***Disclaimer: These summaries are intended to be a guide and not a source of truth. You remain responsible for any actions you take on the grounds of this information. Please note the date when the summary was last updated to judge accuracy.***

*Updated 2023-02-10*
- The servicing fee and the fee for governance & reporting (S,G,&R) are:
    - 125bps on first $10M of each participation.
    - 75bps thereafter.
- Uninvested dollars in the RWA Master Participation Trust will be invested in a short-term treasury money market such as [SDIT Treasury II Fund Class F (SCPXX)](https://seidocs.filepoint.live/assets/pdfs/Summary_Prospectuses/SDIT-TreasuryII-Fund-Summary-ClassF.pdf)
- MakerDAO's legal fees will be covered by Cogent and [MaxStability](https://www.stability.business).
- This proposal has been assigned `High-Impact` based on the methodology listed [here](https://manual.makerdao.com/governance/off-chain/impact-estimations).

***Disclaimer: These summaries are intended to be a guide and not a source of truth. You remain responsible for any actions you take on the grounds of this information. Please note the date when the summary was last updated to judge accuracy.***

*Updated 2023-02-10*