Capital Markets Update – Week of February 1, 2020 (audio)

In an effort to provide even greater transparency around our offerings and our investment platform, the capital markets team provides weekly updates.

Listen below for Paola’s views on our short-term note program and the current private credit landscape from Percent’s perspective.

Please find the transcript for this video below.

Hi everyone, this is Paola Rios, an Analyst on our Capital Markets team here at Percent. Thank you for tuning into this week’s audio update where we provide a recap of the market, and an update on our retail and PercentPrime platform notes for the week ending January 31st.  Let us unpack!

Not a dull moment in the equity market last week, as we experienced the worst week of performance since October 28th of last year, across all major indexes. Wednesday embodied the pinnacle of the phrase hump day. Due to a short squeeze executed led by a forum on Reddit, GameStop’s stock soared, amongst other, and hedge funds found themselves facing monumental losses on stocks they had shorted. GameStop’s stock reached ~$347 by EOD Wednesday, reflecting an increase of nearly 200 points. The following day, online brokerage firms such as Robinhood, E*Trade, Interactive Brokers, and others enforced restrictions and limited trading consequently catalyzing a debate questioning the underlying fairness and efficiency of the market and degree and tolerance of market manipulation. The week ended with the worst performance across all indexes with around negative 3 to 4% across all major indexes, except for the Russel 2K, which secured it’s fourth positive month. 

Amid losses, the market remained unscathed by the promising news of an additional vaccine and improvement in case count, positivity rates, and hospitalizations in select regions of the United States.  Johnson & Johnson’s single dose vaccine has been found to be 66% effective against COVID-19 and protects against more severe cases. This news comes in tandem with the EU’s approval of the administration of the AstraZeneca vaccine in adults of 18 years of age and older.  

Shifting to the fixed income markets, U.S. High-Yield Bonds saw another week of outflows. The 10yr and 30yr treasuries finished at 1.11% and 1.87%, one and two basis points wider than last weeks close, respectively.  

Looking at our retail and PercentPrime issuance, over all a busy week as we closed and settled five transactions. Net cash flows remained positive, and we continued to see a growing average of new signs ups and funded accounts.

  • PLN1 2021-1, a roll from 3-AC, closed at $1.25mm at an APY of 8.50%. Originated by Pollen VC, a provider of cash advances to mobile app developers, our Pollen notes have consistently remained one of our most popular and competitive note programs.
  • PMF1 2021-1, a 6-month note, originated by Pulse Medical Finance, successfully closed at $2MM, at 13.00%. This represents a negative 25bps new issue premium from our previous close.
  • NWC1 2021-1, a rollover from 5-M, originated by Northwest Capital closed at $4.8MM, reflecting an upsize of $400K that was fully subscribed within a few hours.
  • ZIN1 2021-1, a 2-month note, offering 12.25% APY, was fully funded at $1.24mm by existing investors.
  • WAT1 2021-1, a 28-month note offering 11.00% APY closed at $875K. This offering marked our inaugural PercentPrime offering with Lendable, a provider of debt financing to rapid growing fintech’s in emerging and frontier markets.

Earlier last week we also launched two offerings, one on our retail and one on our prime platform, and are glad to report that they are both fully subscribed. On Thursday, we launched an auction for 4 rollover offerings, which we officially closed today. We will syndicate these offerings this week, so stay tuned for launch dates and times.

Additionally, on Wednesday we held our quarterly investor update led by our CEO, Nelson Chu, and Head of Capital Markets, Prath Reddy. If you were not able to attend, you can access the audio recording here.

That is all for this week’s update. Thank you for tuning in and your continuous support; have a great week!

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Nothing in this video should be construed as an offer to sell securities or a solicitation of an offer to buy securities. All investment involves risk and the possibility of loss, including loss of principal, and neither past performance nor forward looking information is a guarantee of future results.

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