Cadence | Case Study #2 - Our Shortest Tokenized Debt Offering

Case Study #2 – Our Shortest Tokenized Debt Offering

On February 15, 2019, Cadence’s SPV issued $750,000 in a 1 month structured note yielding 0.800%

Last Friday, Cadence successfully raised $750,000 in structured notes with a 1-month term via a designated SPV. The notes carry an attractive 10.030% APY (0.8% yield), supported by high quality cash flows from term loans and revenue advances extended to Amazon merchants. These underlying assets are underwritten and serviced by SellersFunding, our origination partner in this offering.

Following the initial launch of a $500,000 offering on February 6, 2019, strong investor demand quickly led to an order book that was over 2x oversubscribed. The strong interest ultimately allowed us to upsize the offering to $750,000 and allocate the notes to a healthy mix of both accredited retail and institutional investors.

Similar to our most recent 90 day offering, the deal was very well received by investors, citing strong relative value in absolute yield, as well as unparalleled liquidity offered by the 1-month maturity. 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.

Akin to all Cadence offerings, investors received a typical debt security term sheet at close 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 third tokenized structured notes offering after completing its aforementioned 90 day offering on January 24, 2019 and its inaugural offering on January 2, 2019.  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
Head of Capital Markets
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