In an effort to provide even greater transparency around our offerings and our investment platform, the capital markets team provides weekly updates.
Listen below for Charlie’s most recent views on our short-term note program and the current private credit landscape from Cadence’s perspective.
Please find the transcript for this video below.
Hi everyone, this is Charlie Lienau, Managing Director on the Capital Markets team here at Cadence. I would like to thank everyone who is tuning into this week’s market update for the week ending January 11th, 2021. Let us get started!
Despite a slow open in the equity markets for the first business day of the year, stocks this week continued the rally we saw take place towards the end of 2020. The strength in the stock market comes despite the turmoil we saw take place at the Capitol in Washington mid-week, which delayed the congressional confirmation of Joe Biden’s presidential victory. This week we also had news from the US Labor Department that 140,000 jobs were lost in December, as surging new COVID-19 cases slowed hiring and led to more layoffs, amid a still slow rollout of the vaccine. Switching gears to the fixed income markets, we saw the 10-year US Treasury hit its highest level since March 20, breaking above 1.1%, closing the week slightly below that. For primary markets, we did not see much change in terms of spreads, with IG spread keeping constant at 96 and the HY spread widening 10 points, from 350 to 360.
Now, diving into our Short-Term Note Program. We are proud to share that for four out of the five days last week on the Cadence platform we had net positive flows, attesting to the ongoing demand and growth of our investor base.
Last week we closed one transaction, transaction CHY1 2021-1, the first transaction with Cherry this year, as they continue growing in the Med Spa vertical. This is a 9-month senior note, that has an amortizing structure as of month 7, that closed for $240,000. This transaction is a rollover note from 15-H, represented a $31,000 upsize and 50bps negative new issue premium.
Today we are closing two transactions:
AXL1 2021-1. This is a $1.35 million 2-month subordinate offering with collateral from Axle Payments. This is a rollover from 11-K and represented a 50bps negative new issue premium. This transaction was allocated to existing investors from Axle’s prior offering.
ZZN1 2021-1. This is a $925,000 3-month senior offering with ZayZoon. This is a rollover from 18-E and also represented a 50bps negative new issue premium from the prior offering. This transaction was allocated to existing investors from ZayZoon’s prior offering.
In other news, last week we also announced our second Cadence Prime transaction, for our longstanding originator Wall Street Funding. Our Cadence Prime platform offers more bespoke structures that are typically slightly longer in duration. This opportunity is open for investment now and is looking to close on January 14. More information available on the deal page.
Last week we also launched an auction for TSM1 2021-1, SLT1 2021-1, and PLN1 2021-1. For access to the auction processes please subscribe to Cadence.
That is all from us for this update. Thank you again for tuning in, wish you all a great 2021, and we look forward to catching up with you again soon.
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Nothing in this video should be construed as an offer to sell securities or a solicitation of an offer to buy securities. All investment involves risk and the possibility of loss, including loss of principal, and neither past performance nor forward looking information is a guarantee of future results.