Private Credit

Motorcycle Loan Portfolio III

Annualized yield3

Term3

39 months

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Status

Waitlist open

Remaining

Accepting $10,000 - $1,000,000 investments

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Accepting $10,000 - $1,000,000 investments

Overview

Performance Update

• View the most recent update for other Motorcycle Loan offerings: Motorcycle Loan Portfolio I and Motorcycle Loan Portfolio II.

• Motorcycle Loan Portfolio I and II, the first portfolios in this series originated by the same lender, continue to re-pay ahead of expectations and meet their net annualized yield expectations.

• Please note Motorcycle Loan Portfolio III does not feature any of the underlying loans in the previous portfolios, i.e. portfolios are not cross collateralized.

Invest in a portfolio of 1200+ seasoned loans backed by high-end motorcycles including brands such as Harley Davidson, Suzuki and Kawasaki. Each of the loans in the portfolio have been performing in line with expectations for at least 12 months (i.e., no delinquencies or defaults). This is the third Motorcycle Loan Portfolio offered on Yieldstreet, previous portfolios continue to outperform initial expectations.

Potential portfolio benefits of investing in this offering

  • Seeks to generate higher income than traditional fixed income
  • The secured nature of the portfolio provides investors with principal protection. The loans are backed by high-end motorcycles that may be repossessed and sold in the event of a default. Resale values have historically allowed lenders to recover most of their principal.
  • The diversified portfolio helps mitigate concentration risk relative to investing in a single loan.

Premise

Motorcycle Loan Portfolio III was structured with investors’ interests first

  • The Portfolio consists of performing, non-delinquent, and non-defaulted motorcycle loans with an average seasoning of 14 months to help mitigate losses.
  • The lender’s historical performance indicates that approximately 50% of the credit losses occur during the first 12 months of the loans. Given that these loans are older than 12 months, the likelihood of the loans within the portfolio becoming delinquent is now substantially reduced.
  • Further downside protection is provided through Yieldstreet’s 90-day buyback provision, whereby the lender must repurchase any motorcycle loans in the Portfolio that default within the first 90 days after the closing date.
  • The lender’s interests are aligned with investors as the lender will only collect its annual 3.5% servicing fee after Yieldstreet is paid in full and monthly performance targets are met.
  • The Portfolio of secured loans was underwritten with a conservative loss assumption. Historically, the lender has experienced a loss rate of ~5.7%, however, Yieldstreet applied a larger loss rate of 7.1% throughout our projections, building in a buffer to help protect investors’ yield and principal.
  • In addition to the use of a conservative loss rate, if losses exceed projections, the lender won’t earn their 3.5% servicing fee and excess spread, and those funds would be passed on to investors to help them achieve the targeted net annualized yield.
  • It is expected that the acquisition of Motorcycle Loan Portfolio III will close and funds raised via this offering will be applied by June 30, 2022.

Experienced lender with thorough underwriting guidelines and strong track record in collecting unpaid debt

  • Since January 2015, the lender has originated, funded and serviced more than 10k loans totaling more than $90M in principal deployed across more than 560 motorcycle dealers in 29 states.
  • The lender utilizes proprietary underwriting guidelines to help mitigate delinquencies and defaults. The criteria include, but are not limited to, minimum income requirement, advance rates and down payments.
  • Should a borrower default, the lender has a dedicated team to collect on accounts and/or repossess vehicles to allow them to eventually sell the motorcycle to potentially recover outstanding loan proceeds.

Performance in prior Motorcycle Loan Portfolio vintages, I and II, have outperformed expectations

  • Since launch, both portfolios have experienced lower loss rates and returned principal to investors at a faster rate than expected, providing a cushion in the event of higher losses later in the portfolios’ life.
  • Given accelerated principal paydowns, the term of both portfolios may be shorter than anticipated. The adjacent chart analyzes the projected losses vs actual losses for Motorcycle Loan Portfolio I and II, demonstrating our conservative approach to underwriting.

Demand for luxury motorcycles and resale values are higher than ever, making them a strong form of loan collateral

  • Motorcycle sales and ridership hit record levels in 2021. Per MotorCycles Data, over 550,000 motorcycles and scooters were sold, a 15-year high and 9% increase compared to 2020.
  • Demand for motorcycles has seen an increase in demand since the beginning of the COVID-19 pandemic as riders sought socially distant activities and methods of transportation.
  • On the supply side, manufacturers have been experiencing supply chain disruptions impacting their ability to produce more motorcycles to meet the increase in demand.
  • Notably, the supply chain shortages and pandemic-related increase in demand have increased the prices for used motorcycles as riders opt to buy used instead of waiting weeks for the delivery of new vehicles.
  • The increase in used motorcycle prices is very supportive for recovery rates in the event a borrower defaults on their individual loan.

Essentials

Please refer the Series Note Supplement for more details about this offering.

Capital Structure

Where does Yieldstreet lie in terms of priority?

  • Yieldstreet is the most senior lender in the capital structure as it purchased 100% of the ~$8.2M portfolio of consumer loans from the motorcycle lender.

Cash Flow

How do I get paid?

  • Investors are expected to earn monthly interest payments at a target annualized net yield of 9%. As cash flows are received by the Fund, unpaid fund expenses, reserve amounts, Yieldstreet’s management fees and annual member expenses are deducted first, and then capital contributions are returned to investors. Next, the remaining proceeds are paid to investors. The first income distribution typically occurs at the end of the first full month after launch, however, investors may not see this payment reflected in their wallets at this time if amounts set forth in the Operating Agreement have not yet been paid in full. Once those amounts have been paid in full, investors will begin receiving payments in their wallet. Please refer to the Operating Agreement for more details.
  • The portfolio has a target remaining term of 39 months.
  • The portfolio of loans are amortizing in nature, as such principal is expected to be repaid over the of the investment and will be returned to investors as it is received from the borrowers.
  • The lender also has the option to buy back the portfolio in full when the amount owed to Yieldstreet is less than $1M. This could result in an earlier repayment to investors around 36 months based on projected cash flows.

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  • Returns & Management fees

    Ann'l management fee

    1.75%

    Target ann'l net yield

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  • Schedule

    Payment schedule

    Monthly

    Target term

    39 months

    Interest Type

    Actual 360

  • Structure

    Tax document

    1099-INT

    Offering structure

    BPDN

    Ann'l flat expense

    0.25%

Docs

Content

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.