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How Oversubscribed Offerings Work on Percent

After launching our new investment process, investors can now select their investment amount and minimum APY (Annual Percentage Yield) when making an investment request. This allows for greater flexibility, giving investors an increased likelihood of participating in an offering. 

Sometimes, our private credit offerings are popular to the extent that they become “oversubscribed.” This means there is more investment demand than the offering size, so all investment requests may not be filled. When the final APY is set by the Borrower, some investors may be excluded from an offering due to setting a higher APY for their investment request.

Maximizing Your Chances of Participating in an Offering

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

  • Set a lower minimum APY:  In order to participate in the investment offering, your minimum APY must be lower than or equal to the final APY of the offering. To adjust the minimum APY of your investment request, navigate to the Offerings page, and use the investment form to edit your existing investment request.
  • Set an appropriate minimum investment amount: In addition to setting your investment request, you can also set a minimum investment amount. Setting a lower minimum investment amount will increase the chances of having at least part of your investment request fulfilled.

An Example of a Hypothetical Offering

Let’s take the following hypothetical example of an investment offering:

Offering Details:

  • Offering Size: $1,000,000
  • APY Options: 9%, 10%, 11%
  • Cumulative Demand by Minimum APY:
    • 9%
      • $500,000 (subscription rate of 0.5x)
    • 10%
      • $2,000,000 (total subscription rate of 2.0x)
    • 11%
      • $3,000,000 (total subscription rate of 3.0x)

The borrower was seeking $1M in funding. The borrower selected 10% as the final APY, resulting in a 2x oversubscription rate. Subsequently, investors who selected an APY of 10% or lower had their investment requests reduced by approximately 50% as there was excess demand for the offering. Investors who selected an APY greater than 10% had their investment requests refunded and did not participate in the offering.

When oversubscriptions occur in certain eligible offerings, investment requests are downsized in order to allocate certain percentages to Percent Blended Notes, our managed investments providing diversified algorithmic exposure to all eligible notes on the platform. As managed investments, Percent Blended Notes maintain priority allocations for oversubscribed deals. Interested in investing in Percent Blended Notes? Learn more today.

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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