Withdrawing From Junior
Junior is the pool's first loss layer, so leaving it takes notice. The rules stop Junior lenders from exiting just ahead of a loss and passing it to those who stay.
Step by step
Give notice
Request a withdrawal. Your shares move into escrow (held by the protocol, not by you or Spout), stop earning yield, and keep bearing losses.
Wait 45 days
The notice period runs.
Join the queue
After 45 days your request joins the first in, first out queue.
Get paid
You are paid as cash comes in from settlements, repayments and new deposits, at the share value on the day you are paid, less the 0.20% withdrawal fee.
Why Junior is paid at the payment date value
A Senior claim is fixed in dollars when it joins the queue. A Junior claim is not. If Junior lenders could lock in a value by giving notice, someone who saw a loss coming could give notice and leave the loss to everyone else. Paying at the value on the payment date keeps the first loss layer honest.
Other limits
- The Junior minimum
- While the pool's yield rate is above Senior's 7%, a Junior withdrawal cannot take Junior below 12% of the pool.
- The cash reserve
- A Junior withdrawal cannot take the pool's available cash below 15% of its value.
- Recent bad debt
- Junior withdrawals pause while a bad debt event from the last 30 days has not yet been made good.
- Pauses
- Withdrawals pause while a liquidation settles.
Selling your place
Junior claims in the queue can be listed for resale too. Because a Junior claim keeps bearing losses until it is paid, buyers price that risk into what they offer.
Cancelling
Cancel at any time before you are paid. Your shares return to the pool at the current share value and start earning again. If you request again later, a new 45 day notice period starts.