Consumer Goods Leasing Portfolio I

Invest in a secured portfolio of 1,000+ consumer leases backed by a range of consumer products such as home appliances, lawn and garden equipment, furniture, jewelry, among others.

Key Takeaways:

Attractive weekly income: The portfolio of leases is expected to pay weekly income at a target annualized net yield above traditional fixed income.

Leases purchased at a discount: Leases are expected to be purchased at a 33% discount to help enhance principal protection.

Buy-back and replacement provision: The Originator is obligated to purchase or replace all leases that default or repay early.

Conservative loss assumptions: In the unlikely scenario the Originator does not fulfill their obligation mentioned above, the portfolio is structured to withstand up to approximately 1.4x historical losses without impacting the target yield and up to 2.1x historical losses before losing any principal.

Collateral backed leases: The leases are backed by the purchased assets, which could be repossessed and sold in the event of default.

Amortizing leases: The term of the portfolio may be shorter than anticipated given principal prepayments made by consumers. In fact, based on historical performance and projected payments, investors can expect to receive their invested principal in approximately 20 months.

• Yieldstreet partnered with the Originator to purchase up to $10M in principal value of newly originated consumer installment leases at a 33% discount of the total lease balances.
• The portfolio is expected to consist of 1,000+ consumer leases for a variety of consumer purchases ranging from home appliances, lawn and garden appliances, jewelry, electronics, furniture, automotive accessories, and pets.
• All leases purchased must be performing and consistent with the overall geographic, product type, FICO score, and other makeup of the Originator’s larger portfolio.
• The weighted average term of the leases in the portfolio is 36 months with a maximum term of 52 months.
• The investment includes an up to 6-month investment period, followed by an up to 36-month amortization period in which principal and interest will be returned to investors as it is paid by the borrowers according to a waterfall.

• The portfolio is expected to be purchased at a discounted price, and is structured with conservative loss assumptions and buy-back provisions to help provide downside protection.
• The leases are expected to be purchased at a 33% discount of the total lease balance to provide principal protection.
• Furthermore, the Originator is obligated to purchase or replace any and all leases that default or repay early at a discounted price.
• This obligation exists throughout the full life of the leases; however, if this obligation was not fulfilled, the portfolio would be structured to withstand up to 1.4x historical losses without impacting the target yield and up to 2.1x historical losses before losing principal.
• The investment was also structured to align the Originators' interests with investors as their income will be received at the end of the transaction, after Yieldstreet has realized its preferred return, and the Originator’s departure from the program would negatively impact its liquidity and its ability to grow.
• While the target term is 35 months, investors can expect to receive their invested principal after 20 months based on the portfolio's weighted average life (WAL).

• The Originator is a consumer finance firm founded in 2008 that offers small-ticket consumer lease-to-own opportunities for a wide range of consumer products through 1,000+ active merchants across 46 states.
• The CEO and Founder of the Originator held senior positions at other consumer finance companies prior to developing his proprietary lease underwriting model and founding the Originator.
• The rest of the management team has decades of experience in the consumer finance industry. The Originator is partnered with over 1000+ active merchant retailers across 46 states to originate eases.
• Since 2014, the Originator has originated and funded more than 28,000 leases totaling over $118M in principal deployed. The Originator’s existing credit facilities support approximately $50M worth of leases.
• The Originator has proprietary underwriting guidelines developed to maintain quality and consistent lease portfolio performance. The criteria include, but are not limited to, minimum income requirement, credit score requirement, and employment requirement.

• Specialty finance can be broadly defined as any financing activity that takes place outside the traditional banking system.
• Following the Global Financial Crisis (2007-2009), banks and larger financial institutions were forced by a combination of market conditions and increased regulations to significantly tighten their lending standards.
• This financial conservatism has essentially closed off the traditional credit market to many consumers and small businesses, opening the door to specialty finance firms to play a larger role in providing structured finance options to these borrowers.
• Regulatory reforms designed to strengthen traditional lenders’ balance sheets have caused them to become more conservative and provide less credit to large swaths of the economy, including specialty finance companies.
• This reduction in capital available to specialty finance companies has created an opportunity for new lenders to step in and provide additional financing to help these companies grow.

• Yieldstreet expects to purchase up to $10M of newly originated consumer installment leases from the Originator at a discount for an aggregate purchase price of approximately $6.35M.

• Investors are expected to receive weekly distributions during the amortization period, which is expected to start in June or July 2023

• The portfolio has a maximum term of 52 months; however, a target term of 35 months is expected after accounting for early repayments and cash flow sweeps. There is no guarantee that the target term will be achieved.

• As cash flows are received, 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. Please refer to the Operating Agreement for more details.

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

• 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 1.50% on their entire investment.