Private Credit

Supply Chain Financing I.X

Annualized yield3

Tiered pricing

Yes

Term

4 Mo.

Per the amended marketing rules adopted by the SEC, some investment details can only be shown to certain logged-in members.
Status

Closed

Recently funded

Accepting $10,000 - $500,000 investments

Have an account? Log in

Accepting $10,000 - $500,000 investments

Overview

A supply chain financing facility provided to a global conglomerate in the durable consumer goods industry with annual revenues of over $2B.

  • Rated conglomerate: Rated B+/BB-/B2 stable by the three leading rating agencies, the conglomerate has historically generated operating cash flow and maintained liquidity sufficient to service debt and unsecured trade payments
  • Attractive yield: An alternative to traditional fixed income and offered at a target yield that is expected to outpace the current rate of inflation.
  • Short term: Short-term private credit may potentially offer higher returns than liquid bonds due to an illiquidity premium as the credit is not traded in the public market where pricing is transparent. The short-term nature also potentially offsets the impact of inflation in so far as investors are not locked in at a given yield for too long, providing flexibility to reinvest proceeds in a short amount of time at a new higher yield if rates increase.
  • Facility track record: The global conglomerate has been utilizing this facility since 2019, with over $1B funded in total to date. Since the facility was created, the global conglomerate has never missed a payment.

Exclusive tiered pricing available

  • We are currently offering a management fee reduction to investors that meet a certain investment threshold.
  • Per the adjacent graphic, if an investor allocates $250,000 to the deal they will receive a 0.25% reduction bringing their effective management fee to 1.75% on their entire investment.

Updates on prior Supply Chain Financing vintages

• View the most recent updates for Supply Chain Financing I.O and Supply Chain Financing I.P.

Premise

Investment details

What am I investing in?

  • A supply chain financing facility provided to a global conglomerate in the consumer goods industry with annual revenues of over $2B.
  • The conglomerate is a US-based manufacturer and distributor of durable consumer goods and parts that has grown substantially in recent years.
  • Rated B+/BB-/B2 stable by the three leading rating agencies (S&P/Fitch/Moody's), the conglomerate has historically generated operating cash flow and maintained liquidity sufficient to service debt and unsecured trade payments.

Investment strategy

What is the value proposition?

  • Supply chains power global trade. However, supply chains face cash management challenges because the delivery of goods to a purchaser/obligor may be misaligned with the timing of payments to suppliers.
  • Supply chain financing may help alleviate payment inefficiencies by providing prompt payment to suppliers at time they ship goods to the purchaser/obligor, while allowing the purchaser to pay for those goods on extended payment terms.
  • Supply chain financing therefore has the potential to benefit both buyers and suppliers, contributing to their growth and innovation.
  • Yieldstreet plans to fund approximately $15,000,000 of approved supplier invoices owed by the conglomerate. It is expected that the participation of SCF I.W will close and funds raised via this offering will be applied on or about December 8, 2022. The final purchase price will be determined at the time of funding and will depend, in part, on the 6-month Secured Overnight Financing Rate (SOFR) rate as determined two days prior to the purchase.
  • The conglomerate is bound by the terms of an Irrevocable Payment Undertaking (“IPU”), which is an unsecured contractual obligation to pay the full amount of each approved invoice without any reduction, setoff, or counterclaim on or about June 7, 2023.
  • Payment proceeds will be used to repay investor principal and interest at maturity.

Behind the investment

Who is the servicer of the facility and how has the facility performed historically?

  • The investment is managed by Raistone Capital. Raistone Capital serves as the servicer of the facility, brings deep trade finance experience and today reports over $2B of investable pipeline. Raistone will continue to service this facility.
  • The global conglomerate has been utilizing this facility since 2019, with over $1B funded in total to date and $461M outstanding. Since the facility was created, the global conglomerate has never missed a payment.
  • Since July 2020, Yieldstreet has been providing funding to the facility.
  • To date, we have funded ~$407M of Supply Chain Financing I series offerings, with more than $343M of principal and interest repaid to date and $82M in principal still invested.
  • This offering will be the 30th time we have funded the program.

Market backdrop

Why should you consider investing?

  • U.S. inflation has recently hit its highest growth rate in the last 40 years, making investments with inflation hedges a potential way for investors to diversify their portfolio with income producing offerings.
  • Supply chain financing is currently offered at a yield higher than traditional fixed income investments and higher than the existing rate of inflation.
  • The short-term nature of the investment means that investors are not locked in at a given yield for too long, thus providing flexibility to reinvest proceeds in a relatively short amount of time at a new higher yield if inflation rates continue to increase.

Essentials

Please refer to the Series Note Supplement in the Documents section for more details about this offering.

Capital structure

Where does Yieldstreet lie in terms of priority?

  • The conglomerate’s obligation to pay is not traditional debt, but instead is a contractual obligation that is not secured by any assets.
  • Repayments are expected to be made by the conglomerate in the ordinary course of business like other trade and business payables that are dependent on the conglomerate’s cash flow.

Cash flow

How do I get paid?

  • The offering has a targeted term of 6 months.
  • Investors can expect to receive a single principal and interest payment upon maturity, net of all fees and charges summarized below and disclosed in the offering documents.
  • As with any unsecured obligation, payment is necessarily dependent on the conglomerate’s continued solvency and compliance with its contractual repayment obligations.

Accessibility

Who can invest?

  • Eligible investors must verify that they are accredited investors. Please refer to the Private Placement Memorandum for more information.
  • YS IRA accounts are eligible to invest in this offering.

Returns & Management fees

Annual management fee

1.5%

Target ann'l net yield

Login to view

Schedule

Payment schedule

At maturity

Interest type

Actual 360

Target term

6 months

Structure

Tax document

1099-INT

Offering structure

BPDN

Annual flat expense

0.25%

Slide 1 of 3
  • Returns & Management fees

    Annual management fee

    1.5%

    Target ann'l net yield

    Login to view
  • Schedule

    Payment schedule

    At maturity

    Interest type

    Actual 360

    Target term

    6 months

  • Structure

    Tax document

    1099-INT

    Offering structure

    BPDN

    Annual flat expense

    0.25%

Docs

This offering page describes only certain aspects of the offering ("Offering") of the securities issued by YS ALTNOTES III 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.