Transparency is core to Percent’s mission of making private credit markets more accessible to investors.
Nowhere is that more evident than the ability to easily discover and compare investment opportunities. Within the Percent marketplace, investors can monitor investment performance and see new investment opportunities. To facilitate informed decision-making, Percent offers two ways to compare transactions across terms and critical deal characteristics.
- Pre-set comparables. Every private credit deal includes a link to access deal comparables. These are selected by Percent and/or the transaction’s underwriter based on type of deal, asset-class, geography, etc. Comparables may include prior notes from the same borrower.
- Customized comparables table. To create you own deal comparison table, click on the Markets tab on the top navigation bar. Within the Markets tab, select the Comps sub-tab to compare multiple deals. Upon initial view, the two most recent deals to close will be displayed. To remove these existing deals, click on the ‘X’ in the top right hand corner of each deal card. To add the deals that you want to compare, click on the plus sign in the empty deal card and filter by Financing Type, Collateral Type, Borrower, and Deal.
What characteristics can be compared?
The type of transaction dictates the available information. For example, the data points available for asset-backed financing deals may be different than corporate loan data given the differences in deal structure.
Percent provides the following detailed information, as available based on transaction type:
- Deal Overview – Key dates and other high-level metrics related to the deal, such as Close Date, Maturity Date, Term, and APY.
- Credit Enhancements – Detailed breakdown of relevant deal features and characteristics related to the structure that may offer additional support for the transaction to pay its principal and interest in a timely manner. Examples include overcollateralization*, cash reserve, and cash sweep frequency.
- Asset Details and Modeling Assumptions* – information about the underlying asset(s) securing the transaction, including various cash flow modeling assumptions. This includes asset type, historical default rate, and maximum single obligor exposure.
- Corporate Overview – Data related to the business operations of the borrower, such as country, number of employees, and equity raised to date.
The data is regularly reviewed and updated by borrowers, underwriters and/or Percent, particularly in advance of any new deal by the borrower. In the event a borrower or underwriter prefers not to share this information publicly, it will either be noted in the table or the investor will need to sign a non-disclosure agreement to access it.
*only applicable or relevant for asset-backed financing transactions.
Can Percent’s comparisons help investors quantify risk?
There are a number of different data points in Percent’s comparison table that are useful for investors seeking to assess risk. In addition to the credit enhancements noted above, investors can see if funds are held in segregated accounts, whether collateral has been independently verified, and the number of obligors (and single largest obligor exposure) for any given note.
In many of the asset-based transactions, the assets underlying a note’s performance are analyzed on a regular basis to make sure they are not underperforming, confirm they are appropriately contributing to the note’s performance, and that they meet required collateral/overcollateralization thresholds.
Finally, comparison tables are complemented by Percent’s detailed borrower surveillance reports, critical update reports, and collateral verification reports.
Why is Percent able to offer deal comparison?
Private credit markets have historically lacked standardization, presenting a significant stumbling block to growth. That’s why it was one of the first challenges tackled by Percent. To create an efficient marketplace for investors, borrowers, and underwriters, we created an unprecedented level of standardization, across deal documentation and terms. Every borrower and underwriter on Percent is asked for the same information although the data they provide can vary based on the specific transaction.
That standardization not only gives investors access to detailed deal documentation and deal terms, but it also allows investors to make an ‘apples to apples’ comparison of different deals. You may choose to compare different offerings from the same borrower, transactions with the same financing type, or transactions with similar timeframes. Filtering capabilities allow you to create your own custom comparison, with the confidence that the data you are comparing means the same thing across transactions.
That’s a level of transparency into private credit transactions that no one else offers. Try our deal comparison tool today. Once you login to your portfolio, click the Markets tab at the top and navigate to the Comps sub-tab.