Got a solicitation today from Mercedes Financial on demand notes they are offering to qualified investors. Paying 3%, totally liquid. You can see details at firstclassdemandnotes.com/start.

3% is pretty good these days for liquid funds. Anyone have any experience with products like these from Mercedes Financial?

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14 E250 Bluetec 4Matic "Sinclair", Palladium Silver on Black, 154k miles
06 E320 CDI "Rutherford", Black on Tan, 172k mi, Stage 1 tune, tuned TCU
91 300D "Otis", Smoke Silver on Tan, 142k mi, wastegate conversion, ALDA delete

19 Honda CR-V EX 61k mi
Fourteen other MB's owned and sold
1961 Very Tolerant Wife

" Qualified Investors " = " Accredited Investor " = Someone with a net worth over 1 million US.

It is assumed that if a person has a net worth of over 1 mil they are financially sophisticated enough to be aware of the risks when investing in something exempt from some SEC controls.

I have no idea why MB would want to offer investments outside normal channels. This kind of thing is usually reserved for startups / other iffy ventures.

these notes are senior unsecured (but are not super-senior - none of MBFS' other unsecured indebtedness is subordinated to these notes). So you're pretty close to the equity in the capital structure.

Also, there are no limitations on any other indebtedness, either secured or unsecured, and there is no cross-default between these notes and any other indebtedness of MBFS.

That all seems like a fairly high risk profile for a 3% return. Sure, it's higher than a money market, but that's comparing a highly-diversified fund that spreads its risks across dozens of investments to an investment that bears all the risk of a single company.

I would guess that MBFS is using this as a way to get cheap money from fans of the brand as opposed to what they'd have to pay professional money managers to assume a similar risk profile.