In December, we announced a new addition to the Plenti Lending Platform, the Notes Market. The Notes Market was established by Plenti to provide investors with the ability to gain indirect economic exposure to ABS notes, which has previously been difficult for non-wholesale, non-institutional investors to access. By providing Australian investors the opportunity to invest in its ABS notes, we are furthering our ambition to help investors earn attractive returns and diversify their investment portfolios.
After launching the market in December of last year, we have been met with strong demand from our investors. The initial investment opportunity made available was up to $7 million of Plenti’s 2022 Auto ABS G-Notes, and we’re pleased to report that the entire allocation was matched to Plenti Lending Platform investors. As a result, we are now making a new class of ABS notes available on the market.
Plenti 2022 PL & Green ABS investment opportunity
The Plenti 2022 PL & Green ABS notes were issued in March 2022 through a standard Australian ABS structure, fully tranched from Class A to Class G notes, with Class A notes being the most senior and Class G notes being the most junior. The Class G notes are currently held by Plenti Finance, and are being made available via the Notes Market.
The underlying loans in the Plenti 2022 PL & Green ABS are unsecured, fixed-rate personal and green loans to creditworthy Australian-resident consumers, financed by Plenti Finance.
Borrowers use personal loans for a wide range of reasons, with the most common purposes for the underlying personal loans being to finance the purchase of a vehicle, consolidate or refinance other debts, and for home improvement. Underlying Green loans have been used to fund Approved Energy Products, such as solar panels and home batteries. For more information on Approved Energy Products, see Section 13 of the PDS.
While investors in the Notes Market do not get direct exposure to the Plenti 2022 PL & Green ABS, the terms of the investment made by investors and the risks of repayment of the investment and payment of interest depend on the terms of the notes being offered. This means Notes Market loans provide economic exposure to the ABS notes being offered at the time an investor chooses to invest.
What are the key benefits and risks of investing in the Notes Market?
Key benefits of an investment in the Notes Market:
- Economic exposure to an asset class traditionally reserved for institutional investors
- Access to potentially attractive returns
- Regular interest payments
- Potential Provision Fund protection
- Risk mitigation including parent company guarantees in relation to the payment of interest
Further information regarding the benefits of the Notes Market is set out in section 6 of the SPDS.
The Notes Market has a different risk profile to the Flex Market, Plus Market and Green Market, and has been designed for investors comfortable with a higher level of risk to earn a higher return.
Key risks relating to an investment in the Notes Market include:
- Poor performance of underlying loans in ABS trust
- Economic exposure to the most subordinated note in the ABS structure
- Risk of default on the payment of interest
- Investment term may be longer or shorter than the indicative term displayed in your Plenti Account
- Note Purchase Loans have limited recourse to actual payments of principal and interest in respect of ABS notes
- Not all loans funded through the Plenti 2022 PL & Green ABS are sustainably focussed
Detailed information regarding the risks of an investment in the Notes Market is set out in section 7 of the SPDS and section 5 of the PDS. You should read the PDS, SPDS and TMD before making any investment decisions.