Private Credit

Supply Chain Financing II

Annual interest3

Final term

3 months

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

Status

Fully repaid

Recently funded

Accepting $10,000 - $500,000 investments

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Accepting $10,000 - $500,000 investments

Overview

Yieldstreet participated in the supply chain financing program for an international distributor in the paper, packaging, and lumber industry. The receivables acquired were from a supplier of containerboard mostly used in the transportation of produce and other items. The distributor has a proven track record with more than 20 years of operations, over $300M in annual revenue and more than $10M of EBITDA in 2019.

Given that demand for the distributor’s products has increased, this supply chain financing is intended to enable the distributor to support their revenue growth and fill their orders timely. Yieldstreet’s participation in the receivables financing enabled the distributor’s supplier of containerboard to get paid immediately (at a discount) and the distributor has an obligation to pay the full amount of the invoices to Yieldstreet on March 12, 2021. Yieldstreet investors earn a target 7.5% annualized interest rate for this short-term investment.

The originator of this financing opportunity, Raistone Capital, has raised ~$9M for this supply chain financing program, ~$5M of which is funded by Yieldstreet. The remaining ~$4M is funded by several other institutional investors.

Principal and interest are scheduled to be paid at maturity.

Important Notes

• Learn more about supply chain financing programs here.

Yield

Management fee

1.25%

Target net yield

7.5%

Interest Type

Actual 360

Schedule

Payment schedule

At Maturity

Prefunded

Yes

Maturity

Date

Maturity

Mar 5, 2021

Structure

Tax document

1099-INT

Offering structure

BPDN

Expenses

First year expense

$35

Annual flat expense

Slide 1 of 3

Yield
Management fee
1.25%
Target net yield
7.5%
Interest Type
Actual 360
Schedule
Payment schedule
At Maturity
Prefunded
Yes
Maturity
Date
Maturity
Mar 5, 2021
Structure
Tax document
1099-INT
Offering structure
BPDN
Expenses
First year expense
$35
Annual flat expense
$0

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Essentials

Please refer to the Series Note Supplement for any additional details.

Capital Structure

Where does Yieldstreet lie in terms of priority?

The distributor’s payment obligation to Yieldstreet is unsecured and will be made out of cash flow in the ordinary course of business like other trade payables. The distributor is a borrower under a working capital revolving credit facility and the lender has a lien on all of the distributor’s assets.

Cash Flow

How do I get paid?

You can expect to receive a single principal and interest payment at a target annualized rate of 7.5% at maturity.

Assets

What is the repayment obligation underlying the transaction?

The primary source of repayment is the distributor’s cash flow from operations or advances under their revolving line of credit. The distributor has confirmed receipt of the containerboard from their supplier. Through the legal documentation, Yieldstreet holds an Irrevocable Payment Undertaking (“IPU”), which obligates the distributor to pay the full amount of the invoices without any reduction, setoff, or counterclaim on March 5, 2021.

Total gross amount of the payments due to Yieldstreet under the IPU is $5,245.878.91 Given that Raistone acquired the invoices at the discounted price of $5,096,110.07 the difference of $149,768.84 will cover interest payable to investors at a target annualized interest rate of 7.5% and Yieldstreet’s management fee.

Highlights

Experienced Company

Personal Guaranty

Company payment obligation

Increased demand

Approved supplier invoices

Experienced Originator

The distributor supplies containerboard and tissue to a variety of domestic and international customers in five regions of the world: North America, South America, Italy, Spain, and Hong Kong. The distributor also supplies lumber and related building products primarily in the United States for the construction of multi-family homes. \ \ The management team has a proven track record of growing revenue and generating operating cash flow sufficient to service debts and trade payments. The distributor has been in business for decades and has built and sustained growing, long-term relationships with customers and suppliers around the globe.
To further support the transaction, the distributor’s owner has provided a personal guarantee for the supply chain financing facility.
The distributor has provided an IPU that obligates them to pay in full on the maturity date of March 5, 2021. To ensure that there is adequate cash flow to make payments as they come due, the distributor has purchased credit insurance for their receivables from an internationally recognized credit insurance agency rated A by A.M. Best. In addition, they have a nine-figure working capital revolving credit facility with a regional bank.
Since the pandemic began, demand for cardboard, paper and lumber products has increased. Restaurants are now using much more paper in an attempt to cater to the growing number of take-out orders they receive. Consumers are buying more goods online and having them shipped to their homes, generating the need for more boxes. Homeowners are now spending more time at home, which has led to an increase in renovation projects, increasing the need for lumber and building-related materials. People are also leaving dense cities for the suburbs, as such, construction of multi-family homes has spiked. \ \ The distributor has many customers with growing needs for product in the transportation of produce, packaging supplies and the construction industry. The distributor is benefiting from the current increase in demand across all of these industries both domestically and internationally.
All invoices that are part of this supply chain financing were approved by the distributor and reviewed by Raistone.
Raistone Capital is a market-leading provider of accounts receivable financing, helping companies manage their cash conversion cycle and providing them with much needed liquidity to grow and thrive. The collective expertise of Raistone’s accomplished leadership team is made up of industry veterans hailing from the world’s largest trade finance institutions, amounting to over $500B of receivable assets purchased and 150 supply chain finance programs created over the last 15 years. The firm’s industry experience and cloud-based technology is combined with its extremely prudent, market-tested credit underwriting. \ \ Supply Chain Financing II is the second offering originated by Raistone on Yieldstreet. Supply Chain Financing I, a $23M facility, was fully funded in October 2020 and is currently performing in line with expectations.

Resources

Overview of Private Business Credit

Supply Chain Financing Explained

Lifestyle of a Yieldstreet Investment

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.

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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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