Private Credit

Motorcycle Loan Portfolio I

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Status

Closed

Recently funded

Accepting $10,000 - $250,000 investments

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Accepting $10,000 - $250,000 investments

Overview

Yieldstreet is pleased to offer a medium term note with expected monthly principal and interest payments at a 10% target annualized interest rate. Yieldstreet purchased from a national motorcycle lender $13.2M of seasoned consumer installment loans secured by new and used motorcycles from manufacturers such as Harley Davidson, Suzuki, and Kawasaki.

Since its inception in 2015, the motorcycle lender has originated and funded more than 6,900 loans, totaling $65.1M, through its relationships with more than 560 dealers in 29 states. By selling these loans, the motorcycle lender freed up capacity to originate new loans and meet the demand for motorcycle purchases in the current environment where people are seeking more socially distanced outdoor activities.

The pool of loans has a weighted average age from origination of 12 months. Any loan that was defaulted or delinquent was removed from the pool at closing. In addition, the motorcycle lender has to buy back any loan that defaults within the first 90 days from closing. When consumers do not make their payments, the motorcycles can be repossessed and sold in an attempt to recover the outstanding balance of the loan.

Based on the projected monthly payments by the consumers, the notes are expected to fully repay within 34 months. It is expected that 37% of the principal will be returned within year 1 of closing and 31% in the following year.

Yield

Gross yield

12%

Yieldstreet fee

2%

Target yield

10%

Interest Type

Actual 360

Schedule

Payment schedule

Principal and Interest

Prefunded

Maturity

Date

Maturity

Aug 31, 2023

Structure

Tax document

1099-INT

Offering structure

Expenses

First year expense

$100

Annual flat expense

$30

Slide 1 of 3
  • Yield

    Gross yield

    12%

    Yieldstreet fee

    2%

    Target yield

    10%

    Interest Type

    Actual 360

  • Schedule

    Payment schedule

    Principal and Interest

    Prefunded

    Maturity

    Date

    Maturity

    Aug 31, 2023

  • Structure

    Tax document

    1099-INT

    Offering structure

    Expenses

    First year expense

    $100

    Annual flat expense

    $30

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Essentials

Please refer to the Series Note Supplement for any additional details.

Capital Structure

Where does Yieldstreet lie in terms of priority?

Yieldstreet has purchased a 100% interest of $13.2M of consumer installment loans.

Cash Flow

How do I get paid?

As consumers make loan repayments and/or as proceeds are collected from repossessions, you can expect monthly principal and interest payments on the outstanding balance of your investment.

Yieldstreet will pay a 3% per annum servicing fee to the motorcycle lender. This servicing fee will be subordinated to your investment in the event of non-performance, i.e. if monthly collections fall below target expectations, the servicing fee owed to the motorcycle lender for this month will be deferred until you are paid in full. This subordination of the servicing fee incentivizes the motorcycle lender to provide the level of servicing required to achieve the projected results.

The cash flow model projects $1.3M of excess cash generated by the portfolio after losses, servicing fees and repayment of interest and principal on the notes. The excess forecasted cash acts as a buffer against additional losses. After your investment is repaid in full, the remaining cash will be remitted back to the motorcycle lender, providing an additional financial incentive to help ensure that the pool of loans performs at or above projections.

Assets

What is the collateral underlying the transaction?

On August 31, 2020, Yieldstreet purchased a 100% interest in 1,755 consumer installment loans totaling $13,213,036 secured by motorcycles. The composition of this pool of loans is similar to the composition of the motorcycle lender’s total pool of loans.

The criteria used to select the pool of motorcycle loans included, but were not limited to, motorcycle manufacturers, new versus used motorcycle collateral, borrowers’ state of residence, payment frequency, interest rate, and average term remaining.

On average, the loans are at least 12 months from the date of origination and have a weighted average coupon of 20.3%. They have a weighted average remaining term of 43 months. There were no known delinquent or defaulted loans in the pool as of the closing. The average outstanding loan balance was approximately $7,200 with an average monthly payment of $299.

Highlights

Performing Book of Assets
Seasoned Portfolio
Subordinated Servicing Fee
90-Day Buyback Provision
Experienced Motorcycle Lender
  • As of September 30, 2020, delinquency and loss performance data indicates that the loan portfolio has performed in line with historical levels during the COVID pandemic. In September alone, $529k of principal was repaid, $49k more than what was initially projected.

  • The loans have a weighted average seasoning of 12 months. Historical data shows that approximately 50% of all losses in the motorcycle lender’s portfolio are incurred during the first 12 months after origination. By purchasing an interest in seasoned and performing loans, the projected losses are reduced. No loan was known to be delinquent or defaulted at closing.

  • If monthly performance targets are not attained by the motorcycle lender who is servicing this pool of loans together with their own pool of loans, then the motorcycle lender will not collect its 3% per annum servicing fee for any such month. Only after Yieldstreet is paid in full will the motorcycle lender collect any deferred servicing fees for months where the performance target was not attained.

  • As additional downside protection and to further help to mitigate the risk of adverse selection, Yieldstreet has a 90-day buyback provision in place, whereby the motorcycle lender must buy back any loans in the pool that default within the first 90 days after the closing.

  • The motorcycle lender is an experienced non-prime and subprime lender. Since inception, they have originated, funded and serviced more than 6,900 loans secured by new and used motorcycles totaling $65.1M in principal deployed through more than 560 dealers in 29 states.

Resources

This offering page describes only certain aspects of the offering ("Offering") of the securities issued by YS ALTNOTES II LLC ("Issuer"). The Offering is made only by means of the Private Placement Memorandum dated January 14, 2022 and the Series Note Supplement relating to the Offering (collectively, the "Offering Documents"). The information on this offering page is a summary of the Offering, does not purport to be complete and should not be considered a part of the Offering Documents, or as incorporated in the Offering Documents by reference or as forming the basis of the Offering. No person has been authorized to give any information or to make any representations other than those contained in the Offering Documents or in any marketing or sales literature issued by the Issuer or Yieldstreet Management, LLC, as adviser thereto, and referred to in the Offering Documents, and, if given or made, such information or representations must not be relied upon. All investors must read the Offering Documents in their entirety prior to investing in the securities.

Investing in private markets and alternatives, such as this offering, is speculative and involves a risk of loss, and those investors who cannot afford to lose their entire investment should not invest. Returns are not guaranteed.