Can Sugarcane Loans Be A Sweet Investment?
Yieldstreet is providing accredited investors the opportunity to invest $11 million in loans to three Brazilian sugar producers. These funds will support the harvesting and processing of sugar cane. The loans are facilitated through Sucres et Denrées SA (Sucden), a major global sugar trading firm. The investment includes a collateral package of sugar, sugar cane, and export contracts, with protections in place against price drops. Monthly repayments are expected to begin this month.
Jeff Bezos, Bill Gates, Michael Burry, and Ted Turner all have one thing in common: they have invested in farmland. Investing in food production doesn’t have to mean that you need to own your own farm or become a commodities investor.
Agricultural trade finance is not often available to individual investors. Investing platform Yieldstreet is offering accredited investors a chance to invest in one of the world’s most popular food substances, sugar, through a portfolio of $11 million in loans to three Brazilian sugar producers. The funds will be used to harvest and process sugar cane.
The loans are through Sucres et Denrées SA (Sucden), one of the world’s largest sugar trading firms. Sucden purchases sugar and provides farmers with short-term financing. It is a 70-year-old global sugar trading company with over $10 billion in revenue. It is the largest buyer of sugar from the loan borrowers.
The borrowers have sugar export contracts with Sucden that include predetermined quantities of monthly deliveries. Each month, as sugar is harvested and delivered, the sales are used to pay off the interest and principal of the loans. All three borrowers have long-standing business relationships with Sucden and a history of successful sugar cane production. On the investment webinar, Jeremy Austin, General Director of Sucden Brazil, explained that it takes 12 to 18 months between planting and harvesting, which is why the borrowers are seeking loans.
A collateral package, including sugar, sugar cane and export contracts from Sucden, will secure the facilities. Protections in place will add additional collateral if the price of sugar drops. Three different loans also provide a level of protection for investors. The amounts of the loans are determined based on a percentage of the value of the underlying sugar cane.
Investing In The Global Sweet Tooth
Monthly loan principal repayments are expected to begin this month. Approximately 65% of investors’ principal is expected to be repaid within the first seven months. This is Yieldstreet’s second transaction with Sucden. The deliveries and the corresponding principal payments will run from August to December 2024, with the remainder occurring in tranches in December 2025 and April 2026. The minimum investment is $5,000. Yieldstreet is targeting a net annual current yield of 10.4%.
Source Link : https://finance.yahoo.com/news/sugarcane-loans-sweet-investment-220015255.html
