What is the expanded Short Term Notes investment mandate?
Short Term Notes (STN)
In the coming months, we’re introducing a series of new products and platform enhancements designed to give you additional ways to invest in private markets.
To lay the foundation for these launches, we’re making an important update to Short Term Notes designed to diversify the program while seeking to ensure it remains fully deployed.
In addition to pre-funding future investments on the platform, starting with new STN launches after July 15, 2025, we’re seeking to expand the program to also allow capital to be deployed to investments originated by third parties.
Here’s everything investors need to know.
What have STNs historically been invested in?
Yieldstreet has historically raised Short Term Notes to pre-fund Yieldstreet investments before they become available on the platform.
For example, we may fund a new private credit offering using STNs, then syndicate the offering to investors over a period of months, repaying the program.
What is changing?
We are seeking to expand the STN investment mandate to allow capital to be deployed to other investments originated by third parties, including but not limited to, debt investments, which are expected to be shorter-dated, lower-risk in nature.
These new investments are expected to primarily consist of securitized credit, such as commercial mortgage securities (CMBS) and collateralized loan obligations (CLOs).
Please review the fulsome disclosure included in the Private Placement Memorandum found on each STN offering page.
Why are we making the change?
We continue to see high demand for STNs, but the program’s more limited prior investment mandate made it so it wasn’t always fully deployed
By allowing for third party investments, we can help ensure all capital invested in the program remains fully deployed, helping to avoid cash drag.
How does this impact my STN investment(s)?
At first, there is not expected to be any change to the investments in STNs as we seek to receive all necessary consents.
Upon receipt of the necessary consents for the expanded investment mandate, we may begin adding new investments to the program.
Does the risk of STNs change?
We believe the expanded mandate creates additional diversification within the STN program, helping to reduce risk.
Will this impact STN target yields?
No, the program will continue to offer a fixed target yield.
Like most fixed-income investments, STN target yields consider a broad range of factors and this change is not expected to directly impact the target yields offered by the program.
Will the distribution schedule be impacted?
No, the distribution schedule is anticipated to remain the same with investors projected to receive monthly interest payments at a fixed target net annualized yield on their full investment amount.
Investor principal is still expected to be repaid at maturity.
Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.