Capital Markets Update – Week of February 16, 2021 (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 Alex’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.

Hey everyone this is Alex Pirro, a VP on our Capital Markets team here at Percent and thank you for tuning into this week’s STNP market update for the week ending February 13, 2021, where we provide news and insights that are relevant to our short term note program market.

Taking a quick look at markets, major stock averages closed the week up around a percent, as caution began to offset investor optimism regarding ongoing stimulus talks. With jobless claims coming in at 793,000, the pandemic era economy continues to lag estimates.  On the fixed income side,10y and 30y treasury yields were generally flat on the week as investors balance the ongoing progress on the stimulus bill with Powell’s pessimistic comments on the employment outlook. Issuance volumes across high yield continue to be robust with $15.8Bn pricing on the week, dominated by an $3.5Bn issuance from Carnival Cruise Line. The primary ABS market continued its aggressive pace for the year, with $6.8Bn pricing this week across 10 deals across the range of ABS products spanning auto, motorcycle, solar, student loan, equipment ABS and unsecured consumer ABS.

Now diving into the STNP market, it was a busy week with almost $4.6MM pricing from four offerings, which brings our YTD total to just over $28 million…  up about 57% in issuance as compared to the same period in 2020. 

Looking at the technicals, 

  • Net inflows onto the platform have been generally positive as investors look to put capital to work, with roughly $3.5 million coming in over the trailing 5 weeks… 
  • We continue to see robust investor participation in our dutch auction process translating into good demand in final order books. 

Last week we closed four  transactions:.

First up was PLN1 2021-2, a $1.25MM note with Pollen VC, which was a 3-month rollover and carried an APY of 8.5%, which priced in line with its prior offering, and was filled by rollover investors. 

On Thursday we also closed AXL1 2021-2, a $500k note with Axle, which was a 2-month rollover and carried an APY of 10.75%, which was a 50bps negative new issue premium from its prior issuance. This transaction also represented a $850k downsize from the prior offering.

Also on Thursday, we closed ZZN1 2021-2, a $900k note from ZayZoon, which was a 3-month rollover and carried an APY of 10.50%, which was which was a 25bps negative new issue premium from its prior issuance. This transaction was downsized by $30k and was filled by rollover investors. 

On Friday, we closed TRF1 2021-1, a $1.95MM note from ThunderRoad, which was a 3-month rollover and carried an APY of 11.75%, which priced in line with its prior issuance. 

So all in all, we had another busy week with another one lined up as we have several launches going live today for new deals. Thanks for tuning in to this week’s update and we hope you 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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