When Percent started in 2018, we offered a single investment product: private credit investments in ultimately hundreds of notes led by dozens of borrowers. In just three years, thousands of investors have allocated over $440 million across over 270 notes, earning more than $11 million in interest.
We now offer a different investment product: the Percent Blended Note.
What is a Blended Note?
The Percent Blended Note offers investors diversified exposure across Percent’s existing platform deals. Instead of investing in a single borrower’s note, investors can now get exposure to multiple notes through just one transaction.
The underlying assets of the Blended Note consists of notes from eligible programs on the Percent platform that fulfill the requirements set forth by the Eligibility Criteria as defined on the Blended Note deal page and offering documents. These eligible note programs are characterized as having strong cash control, servicing, and reporting requirements, along with having a good standing on the Percent platform with respect to timely delivery of information, past defaults and several other performance requirements.
Unlike existing note programs, the Blended Note will not require investors to periodically rollover their position to maintain their allocation. The Blended Note allows investors to invest once and automatically gain priority access to the diverse array of private credit transactions offered on the Percent platform.
How are investments chosen for the Blended Note?
The Investment Manager (Percent Advisors, LLC) will select investments for the Blended Note according to specific Investment Criteria and proprietary Algorithm designed to maximize investor return and diversification. The Investment Criteria and Algorithm, as detailed on the Blended Note deal page and related offering documents, are summarized below:
Eligibility Criteria – The range of criteria Percent has determined are key qualifiers to distinguish note programs and borrowers that uphold best practices as it relates to cash control, servicing of underlying assets and the notes, timeliness of reporting, and good standing on the Percent platform, among other variables. Note programs that do not currently meet the eligibility requirements for the Blended Note portfolio may become eligible in the future if the borrower decides to modify the deal structure, improve their timeliness on reporting or reach a sufficient track record, among other variables.
Concentration Thresholds – In order to ensure diversification, the Investment Manager will only purchase eligible note programs according to predetermined thresholds that limit the amount that can be invested. Ultimately, no more than 10% of the portfolio will be invested in any one eligible note program, and this allocation will prioritize highest return, shortest duration and highest overcollateralization should there be more than one option on any given day.
Algorithm – The Investment Manager will utilize a proprietary Algorithm to determine capital deployment, interest distributions, principal distributions and cash management on a daily basis. This is an operational process that limits the Investment Manager’s discretion in its decision making when following the Eligibility Criteria and Concentration Thresholds.
Additionally, the Blended Note will receive priority syndication status, ensuring that Blended Note investors have first access to the outstanding Percent deals.
How can I tell which investments are in a Blended Note?
The underlying assets of the Blended Note will be disclosed weekly on the Blended Note surveillance report. Similar to other note programs, the surveillance report will provide asset-level performance and portfolio-level demographics. The link to these reports will be provided on the Blended Note deal page under Surveillance. Please note that this deal page will also include a snapshot of eligible borrower programs on the platform as of the launch of the note.
What is the payment structure for Blended Notes?
Investors will receive variable monthly interest over the first 12-month period of this offering. Monthly interest during this period will largely depend on the aggregate interest payments received from the underlying portfolio of revolving Percent notes and cash managed by the Investment Manager in accordance with the Investment Criteria.
Following this initial 12 month period, the offering will begin to amortize with variable monthly interest and principal repayments. Interest payments and principal repayments during this period will largely depend on the aggregate interest and principal repayments, respectively, received from the underlying portfolio of Percent notes that becomes static as of the 12th monthly anniversary from the close date of this offering.
How can I invest in Percent Blended Notes?
You can find available Percent Blended Notes on the Opportunities page when you sign into Percent.