Other

ST Income Notes Consumer Portfolio I

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Closed

Recently funded

Accepting $15,000 - $500,000 investments

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Accepting $15,000 - $500,000 investments

Overview

Invest in a consumer-themed portfolio of short term income notes. With public market volatility at high levels, the portfolio will seek to mitigate some of the downside risks associated with owning stocks with the goal of generating investors regular income payments over the life of the investment.

Short Term Income Notes Consumer Portfolio I will initially invest in 3 individual income structured notes, each referencing different underlying stocks; Meta Platforms (FB), Starbucks (SBUX) and eBay (EBAY). Each income structured note has varying characteristics, including yield (coupon), downside protection value and strike price.

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Premise

Potential benefits of investing in income structured notes

In a yield-starved world, income structured notes can be a source of income that is paid quarterly and at a rate that is outpacing inflation.
Help to shield investors from public market downturns and volatility given their built-in downside protections.
When owned in conjunction with public equities, the risk adjusted return of portfolios can improve.

High-yielding investment typically favored by institutional and ultra-wealthy investors

Globally, the structured notes market is approximately $3T in size.
Used by institutional and ultra-wealthy investors for decades to help boost the level of income generated by their portfolios.
Major banks participate in their issuance, helping to reduce the risk of default. Yieldstreet typically purchases structured notes issued by Goldman Sachs, Morgan Stanley, JP Morgan, Citi, Bank of America, Barclays, Societe Generale, Credit Suisse, HSBC, Royal Bank of Canada (RBC), and TD Bank.

Generally used to mitigate some of the downside risks associated with owning stocks

For example, consider an investor invests in a stock of company A and an income structured note tied to the performance of the underlying stock A.
The income structured note pays a 10% coupon with a 30% downside protection value, and a 12 month maturity.
If the price of the stock A decreases by 5% at maturity, the returns of the income structured note (assuming the value of the underlying stock remained above the downside protection value for the whole period) tied to the performance of stock A would be 10% (coupon), while the returns of the actual stock would be -5%.
In this scenario, if the portfolio consisted of 50% stock and 50% income structured notes, the investor would make a 5% profit overall (hypothetical example used for illustrative purposes only).

See the Series Note Supplement which illustrates the outcome if the underlying stock of the structured note falls below the downside protection value at maturity.

Tied to the performance of stocks that have been diligently selected

Income structured notes are purchased based on a transparent process that requires each underlying stock to meet certain criteria, which is expected to minimize the likelihood of any significant price decline.

Underlying stocks must be Member of S&P 500
Market cap >$10B
Positive net income for current year
Forward P/E ratio less than the sector’s average or PEG (price to earnings growth) <1 or annual revenue growth >20%
Bloomberg analyst median target share price > current stock price
Short interest <5%
Moderate recent volatility
Relative strength index <70

Parameters in place to ensure income structured notes meet certain standards at a minimum

At least 25% downside protection
Quarterly coupons
9-month term
Annualized coupon >5%
Historical breach of downside protection value <15%
Each stock will have at least a 90% confidence interval of not breaching the downside protection value
Notes chosen will be diversified by an issuer and sub-industry group

Essentials

Please refer to the Private Placement Memorandum and the Series Note Supplement in the Docs section for more details about this offering

What are income structured notes?

A structured note is a debt security issued by major financial institutions. Its returns are linked to the performance of an underlying stock. Structured notes can be income and/or growth focused. To date, Yieldstreet has only offered portfolios of income structured notes.
For income structured notes, on each observation date, the current price of the underlying stock is measured relative to its strike price.
If the current price of the underlying stock on an observation date is equal to or above its downside protection value, then the investor will earn their coupon for that period.

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How do income structured notes work?

If the performance on the observation date is below its downside protection value, then the investor will not earn their coupon for that period.
At maturity (final observation date), if the underlying stock is at or above its downside protection value, then the investors will earn their coupon for that period and receive their full principal back.
If the performance on the final observation date is below its downside protection value, then the investor will not earn their coupon for that period and will receive less than their full principal back.
In this scenario, the amount of original principal will be reduced by the percentage decrease the underlying stock value fell relative to its strike price.
Additionally, the issuing bank also reserves the right to call the structured note early on any observation date after the call protection period.

Please refer to the Private Placement Memorandum and the Series Note Supplement for additional definitions and components of structured notes.

Cash flow

How do I get paid?

Short Term Income Notes Consumer Portfolio I will initially invest in 3 individual income notes, each referencing a different underlying stock.
The portfolio is expected to generate a target net annualized yield of 10.82%.
Each income note will have varying characteristics, including yield (coupon), downside protection value and strike price.
As such, performance for the portfolio will be calculated on a weighted basis of the performance of each income structured note.
Each income structured note is expected to have a term of 9 months.

Returns & Management fees

Management fee

1.0%

Target ann'l net yield

10.8%

Schedule

Payment schedule

Quarterly

Term

9 months

Structure

Tax document

1099-INT

Offering structure

BPDN

Ann'l flat expense

0.25%

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Returns & Management fees
Management fee
1.0%
Target ann'l net yield
10.8%
Schedule
Payment schedule
Quarterly
Term
9 months
Structure
Tax document
1099-INT
Offering structure
BPDN
Ann'l flat expense
0.25%

Docs

This offering page describes only certain aspects of the offering ("Offering") of the securities issued by YS ST STRUCTURED NOTES LLC ("Issuer"). The Offering is made only by means of the Private Placement Memorandum and the Series Note Supplement relating to the Offering (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.

¹ Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in significant losses.

² Represents an average net realized internal rate of return (IRR) with respect to all matured investments in your portfolio, utilizing the effective dates and amounts to and from the investments and net of management fees and all other expenses charged to the investments. Past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. All securities involve risk and may result in significant losses, including the loss of principal invested.[read more]

³ "Annual interest," "Annualized Return" or "Target Returns" represents a projected annual target rate of interest or annualized target return, and not returns or interest actually obtained by fund investors. “Term" represents the estimated term of the investment; the term of the fund is generally at the discretion of the fund’s manager, and may exceed the estimated term by a significant amount of time. Unless otherwise specified on the fund's offering page, target interest or returns are based on an analysis performed by Yieldstreet of the potential inflows and outflows related to the transactions in which the strategy or fund has engaged and/or is anticipated to engage in over the estimated term of the fund. There is no guarantee that targeted interest or returns will be realized or achieved or that an investment will be successful. Actual performance may deviate from these expectations materially, including due to market or economic factors, portfolio management decisions, modelling error, or other reasons.

⁴ Reflects the annualized distribution rate that is calculated by taking the most recent quarterly distribution approved by the Fund's Board of Directors and dividing it by prior quarter-end NAV and annualizing it. The Fund’s distribution may exceed its earnings. Therefore, a portion of the Fund’s distribution may be a return of the money you originally invested and represent a return of capital to you for tax purposes.

⁵ Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.

⁶ The internal rate of return ("IRR") represents an average net realized IRR with respect to all matured investments, excluding our Short Term Notes program, weighted by the investment size of each individual investment, made by private investment vehicles managed by YieldStreet Management, LLC from July 1, 2015 through and including July 18th, 2022, after deduction of management fees and all other expenses charged to investments.

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