Transportation

Marine Finance Vessel Acquisition I

Annual interest3

Term

39 months

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Status

Closed

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Overview

Highlights

Vessel Lease

Ship Management Company

Offering Structure

Interest Payments

Principal Repayment

Additional Vessel Purchase

YieldStreet purchased the associated Vessels to be leased by a European ship management company (“Ship Management Company” or “Lessee”). The purchase of the first vessel (“Vessel A”) occurred on April 27, 2018 and the purchase of the second vessel (“Vessel B”) is scheduled for April 30, 2018. The Ship Management Company recently secured one-year time charters for both Vessel A and B that are projected to generate income in excess of the amounts required to service the monthly lease (“Lease”) payments and vessel operating expenses. A time charter, typically 1-3 years, is essentially a contract for a period in which the Vessels earn a fixed daily rate while transporting goods for the same customer.
The principal of the Ship Management Company has 50 years of experience in the shipping industry. It will operate the Vessels through the duration of the Leases. Over each Lease term, the Ship Management Company has a purchase option to purchase the Vessel from YieldStreet for the purchase price of the Vessel plus any unpaid Lease payments. At each Lease maturity, the Ship Management Company is obligated to purchase the Vessel from YieldStreet for the purchase price of the Vessel plus any unpaid Lease payments.
While most YieldStreet offerings are loans, YieldStreet structured this offering to purchase the Vessels and lease them to the Ship Management Company. This not only creates defined monthly lease payments, but also provides YieldStreet an ownership interest in the Vessels, providing immediate rights to sell the Vessels if necessary.
YieldStreet has purchased a Residual Value Insurance policy (“RVI”) for $18.1M or 100% of the capital provided by YieldStreet. An RVI policy gives the owner of a vessel downside protection by guaranteeing the value of a vessel assuming all conditions of the insurance policy are met. At the end of the policy, if the market value sale price for the vessel is below the insured amount, the insurer would purchase the vessel for the insured amount. To learn more about RVI, please review our article.
The target interest rate to be paid to investors is 8.0%, and the original source of such payments are the monthly lease payments over the Leases’ term of 36 months. The monthly lease payments will be made via the cashflow generated by the secured time charters on the Vessels.
The repayment of principal for the Vessels’ purchase is based on three potential exit scenarios; 1.) Unlike other assets, the value of a vessel can appreciate in certain market conditions. If the market value of the Vessels has increased through the duration of the Lease, it is likely that the Ship Management Company will exercise their purchase option prior to the maturity of the Lease. If the market value of the Vessels decreased through the duration of the Lease, it is likely that at the Lease maturity the Ship Management Company will either 2.) be obligated to purchase the Vessels, or 3.) The RVI policy will be exercised purchasing the Vessels outright at the insured value.\n
This transaction allows for the purchase of additional vessels not to exceed $40.0M of total capital provided by YieldStreet. The Ship Management Company has currently identified and is in the process of acquiring approval to include a third vessel in the transaction, in the same structure including an RVI policy for that vessel. This would be made available on the YieldStreet platform as a second tranche of this offering. The timing of the additional vessel is expected to materialize in the next 30 days but is uncertain until final. As such, YieldStreet investors should only consider the two existing Vessels when making an investment decision. All additional Vessels to be purchased and included in this transaction are subject to Originator and YieldStreet approval and are expected to be similar to the existing Vessels. All vessels, regardless of when your investment is made will be part of the offering and cross collateralized with each other. For important details on this opportunity, please download the Series Note Supplement, and review the information provided on this offering summary page.

Important Investor note

This offering is being made utilizing a Borrower Payment Dependent Note (BPDN) structure, with the benefits of lower minimum investments. For additional detail please see our FAQ.

You can also review our Marine Finance Announcement and Overview Video.

Essentials

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

Returns & Management fees

Gross yield

9.0%

Yieldstreet fee

1.0%

Target yield

Interest Type

Actual 365

Schedule

Payment schedule

Scheduled payments

Prefunded

Yes

Maturity

August 1, 2021

Structure

Tax document

K-1

Offering structure

SPV

Expenses

First year expense

$150

Annual flat expense

$70

Docs

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Content

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

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.

⁷ Investors should carefully consider the investment objectives, risks, charges and expenses of the Yieldstreet Prism Fund before investing. The prospectus for the Yieldstreet Prism Fund contains this and other information about the Fund and can be obtained by emailing [email protected] or by referring to www.yieldstreetprismfund.com. The prospectus should be read carefully before investing in the Fund. Investments in the Fund are not bank deposits (and thus not insured by the FDIC or by any other federal governmental agency) and are not guaranteed by Yieldstreet or any other party.

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