Cadence | Case Study #1 - Our Second Tokenized Debt Security

Case Study #1 – Our Second Tokenized Debt Security

On January 24, 2019, Cadence’s SPV issued $500,000 in a 90 day structured note yielding 2.500%

Last Thursday, Cadence successfully raised $500,000 in structured notes with a 90-day term via a designated SPV. The notes carry an attractive 2.5% yield (10.533% APY), supported by high quality cash flows from term loans and revenue advances extended to qualified Amazon merchants. These underlying assets are underwritten and serviced by SellersFunding, our origination partner in this offering.

The deal was very well received by investors, citing strong relative value from an absolute yield perspective and the inherent liquidity offered in a security that matures in 90 days. Additionally, many took note of the generous risk premium offered despite a very strong underlying credit profile and deal structure offering several credit enhancements and risk mitigants. Ultimately, the notes were fully allocated to a balanced mix of both accredited retail and institutional investors.

Upon close, investors received a typical debt security term sheet but with a unique added line item – the Ethereum Contract. Clicking on this link will reveal the underlying security tokens issued to all investors in this offering and the final anonymized investor allocations on etherscan.io – an Ethereum blockchain browser.

Investors are able to view their designated Ethereum wallet address and the associated transaction ID (their investment in this particular offering) in the “My Portfolio” section within their Cadence account. These two unique identifiers are directly traced back to this anonymized investor allocation list under the aforementioned Ethereum Contact, creating an immutable record of their ownership in this specific offering.

This was Cadence’s second tokenized structured notes offering after completing its inaugural offering on January 2, 2019. However, this was the first offering that was publicly distributed on our platform for all accredited investors. For details and updates regarding our upcoming offerings, please sign up for our private beta. New invitations are being sent daily on a first come, first served basis. We look forward to presenting you with the next investment opportunity!

Author
Prath Reddy
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