Where Private Credit Fits-Understanding Notes Like Ours in Context
"Private credit" gets used as a catch-all term, but it actually covers a wide range of structures. Direct lending funds, business development companies (BDCs), real estate debt vehicles, and asset-backed note programs like ours all fall under that umbrella, even though they behave quite differently from one another.
We think a few structural differences are worth understanding if you're trying to figure out where a fixed-rate promissory note fits into your portfolio.
Liquidity structure. Many private credit vehicles, including BDCs, pool investor capital into a fund with its own fund-level liquidity terms. Our fixed-rate promissory notes work differently. Each is a direct debt obligation between us and the noteholder, with its own term and rate locked in at issuance, rather than a share of a pooled fund.
What's actually backing the return. Some private credit strategies are tied to corporate lending or real estate cash flows. Our notes are largely backed by a portfolio of restructured private student loans, a different underlying asset class with its own repayment dynamics and its own risks, separate from real estate or corporate credit exposure.
Rate structure. Our notes pay a stated, contracted rate for the life of the note, with a range across our note classes. That's a different proposition than a variable distribution tied to how a fund happens to perform in a given period.
None of this means one structure is inherently better than another. We're all built for different roles in a portfolio and carry different risks. But we'd encourage understanding what you actually own, and what's standing behind it, as a useful starting point before comparing yield numbers across categories.
Disclosures
Yrefy refinances distressed or defaulted private student loans. This blog is not an offer and does not disclose the material risks of the notes. Promissory note offers available only through the Private Placement Memorandum to accredited investors. The notes are illiquid, speculative, and involve risk of loss. Not FDIC or SIPC insured. Returns depend on the issuer’s financial condition and are not guaranteed. Securities offered through Nobles & Richards, Inc., member FINRA. Yrefy is not affiliated with Nobles & Richards, Inc.