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How Offering Oversubscriptions Work on Percent

After launching our new investment process, investors can now select their minimum interest rate and desired minimum or maximum investment amount when making an investment request. This allows for greater customization, giving investors a better chance to access offerings based on their specifications. 

Sometimes, our private credit offerings are popular to the extent that they become
“oversubscribed.” This means there is more investment demand than the actual offering size within the announced APY range. In these instances, Percent works directly with originators to lock down a final rate based on demand. Once a final rate is set, some investors may be excluded from an offering due to setting a higher minimum rate or minimum allocation.

Managing an Oversubscription

There are two things investors can do to avoid being excluded from an offering.

  • Setting a lower minimum rate: If your desired rate for an investment is at or lower than the final rate, your chances of being included in the investment on the close date will increase. To adjust the minimum rate in your investment request, log into your Percent account, navigate to the offering page, and click on “Edit Investment Request” to make these modifications.
  • Avoid setting a minimum investment amount: If you set a maximum allocation but don’t set a minimum amount, the chances of having at least part of your investment request fulfilled will increase.

The Case of Torro

TOR SMB Financing Sr. 2022-4, a $1.8 million offering from our partners at Torro, was the first offering to be oversubscribed as part of our new investment process.

This offering received a high level of interest, exceeding the $1.8 million offering size. While it was still open, we notified investors who submitted investment requests for this offering that demand exceeded supply at specific APYs, and we were working closely with Torro to lock down the final rate, then expected to be on the lower end of the 12.50 – 13.50% APY range. (12.50% APY was the final rate.)

Investors were then invited to adjust their investment requests accordingly if they wished to still be included in the offering, which closed on June 23rd — three business days after investors were notified.

Our new investment process provides a more customizable and equitable way for investors to add private credit offerings to their portfolios based on precise preferences. Oversubscriptions will continue to happen due to demand, and we will continue to notify investors when they do.

If you have any questions regarding how our investment process works or how to edit your existing investment request, please reach out to our Customer Success team. They are always here to help.

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