Who provides the money?
are available via Provider
to this program from established, reputable investors located offshore
that are motivated by the short term, no risk placement of sizable
of their funds. There are several Provider sources or Trusts which are
to wire US$ into an acceptable top 150 world depository bank by the
Banking Wire System, one such mechanism is known as S.W.I.F.T.,
in the Custom Presentation Package.
do we know this is not “laundering~ money”?
Any time funds are transferred
over the above referenced “wire”, the transaction is confirmed at both
ends as good, clean, cleared funds not from illegal sources. Advance
is lodged with the receiving bank at the appropriate time (closing)
must satisfy all prerequisites of this “bank-to-bank transfer”. The
common of which is for the receiving depository bank or Lender,
to … acceptance of the money”. This is a general catch-all caveat for
Banker until they are comfortable that the funds are not tainted. No
is going to walk in with a briefcase full of cash.
Why do these
trusts agree to invest their money in this type of transaction?
is an investment which
is attractive to the Provider sources because at no time is their money
Investments of this nature are very rare. Also, the Return On
(R.O.I.) is a minimum one point or 1% in just one day. When this is
once a week, times fifty weeks a year, this can be 50% ROI per year, no
risk! Another reason is that the Trust is whole again at the end of the
day (at closing) and the deposit still remains in the Trusts new
in the closing bank, ready/willing/able (RWA) to proceed on to the next
transaction or Phase II (known as a “cookie cutter’). See next FAQ for
more on this question.
the Investors/Trust deposit 100% and get only 54% back at closing?
master key to this Provider
designed method is the ‘investment grade instruments’ or so-called
CDs” which are severed and stripped of their interest income stream
pledged back to the Trust. The Future Value (fv) of these guaranteed
allows the pre-arranged sell off (by Provider, not the banker) at a
to one of the many Coupon Buyers, which are available to Provider. The
value (fv) becomes Present Value (pv) or cash. This is a simultaneous
arranged by Provider prior to closing and is not part of the bank
So, the results for the Investors/Trust are that they realize a minimum
101% for their 100% placement at the end of the same day (results of a
successful closing). Provider serves as facilitator for this5 function
the hall, so to speak) and brings this party to the surface at the
time, midway in the closing.
an Investor be satisfied with only 1% when the Project gets 18% and the
Lender will get at least 20% over the term and neither has provided any
money to the transaction?
this question is a FAQ.
We think we have covered this enough in the above answers.
does the Investor NOT insist on equity participation in the
are NOT in the “Project
Business” as are Venture Capital investors. We are in the “Money
not the “Project Business” and this technique affords us just that,
A cash placement into a rated bank for a minimum one point profit for
than a week, which is all handled by a seasoned veteran of over thirty
years, Provider. This results in a tested closing which becomes
at your candidate bank. The Banker is now motivated to move forward
subsequent, like transactions using the same funds which are already on
deposit in-house. They just have to change the date and/or name on the
are not paying 8% on CDs?
are “Specially Structured”
instruments by Provider and issuing Bank. The rate reflected in these
is at 8% because this is the number, which works for the fv &
sell off of the interest income stream. Since the I.O. loan rate of 10%
represents a profit center spread of 2% to the Lender each year, the CD
rate is therefore 8%. Should the loan CD (a “special instrument”) rate
be less or more, the spread would remain at the same 2% profit to the
bank. Therefore, the 8% CD rate requires a 54% rebate from the proceeds
of the loan to extend to a return of 101% to the Trust. Another
would be 7 ½% with the I.O loan rate at 9 ½%, or even 7%
with the I.O. loan rate at 9%. And so, the rebate would have to be
higher resulting in a slightly smaller net “fallout” to fund the
On the other hand, a 9% CD rate with an 11% loan rate is still relative
to the 2% profit spread to the Lender Bank. The numbers are like a
scale; the results must provide the 101% to the Investors/Trust or we
this is all relative
to two vital perquisites:
bank instruments must be
investment grade so the Investors will end up with their 101% at the
- A 2%
per year or a total sum
of 20% to term is projected as the relative profit spread to the Bank.
are not offering/trading CDs today at this high rate?
previous FAQ has answered
this question. However, we must realize that the term CD has been used
loosely in this package because this is the easiest definition for most
parties to understand. These CDs are not the typical Certificates of
which are so1d and traded in the banks. They have been referred to as
Structured” CDs (or Bank Trust Notes or Mid Term Notes) for the purpose
of discussion until there is a better level of understanding of the
of this approach. This may be a Bank Trust Note or Mid Term Note. They
basically are a Promissory Contract guaranteed by the issuing bank that
the contracted income stream will be paid “as agreed” resulting in the
required fv amount. This assures that these are the top graded
required for the salability of the “coupons” at a discount to obtain
desired present value, pv (cash now).
Why must the coupons
be non-redeemable, irretractable, non-callable, inextinguishable, and
of those other official bank terms?
Principal Guarantee required
by your Lender to set up the Loan transaction must provide the bank
the secured collateral, their own paper, of which they have total
This means that the corpus of the CDs are pledged and impounded to the
custody of the Lending Bank. The Investor/Trust contracts with the
that at term maturity, in ten years, the Lending Bank then repatriates
the CDs. The Investors/Trusts guarantees that they will not arrive to
the CDs, at any time in the future! This results in the bank being in a
position of not having to pay out the award at maturity. So the
of this ‘no-obligation” position is “a no lose” for the lending bank.
the Bank be expected to issue instruments, which are non-callable?
in the explanation above,
the coupons must remain non-callable during the term for the future
(ft,) to equal an amount that attracts Provider’s Coupon Buyers. Your
lender controls the income generating, portfolio hedge account, so the
Borrower have nothing to do with this operation.
the collateral to the Lender?
risk to the Lender is
minimized because they are holding all of the collateral which is their
own paper or, (if in a two bank transaction) that of their up line
In either case, this very strong security and in the first place, is
Principal Guarantee. Since the Lender uses the funds on deposit from
Trust, the Lending Bank puts up no money in order to facilitate a
Deposit Matching Funds - Loan Back or Back-to-Back transaction.
collateral is covered later in the package for the debt service hedge.
the motivation for the Bank(s) to consider such a transaction?
of the design of these
techniques is focused from both our sides, the Investors & the
to give your candidate Lending Banker a comfort level where they will
up to the plate and participate in putting this type of transaction
thereby causing all parties at the table to Win. The lenders will not
your project or your statement as collateral in order to risk a
lending of the bank’s funds. Therefore, you are bringing in these
for consideration. Once they understand that this offer is designed to
cover and minimize the bank’s exposure from A to Z using our new money
“Other People’s Money” (OPM), then we expect this will get their
strongly enough to indicate that they are at least interested. The
of these programs has come through many versions and adjustments due to
the different requirements of banks. This offer is the result of what
been gleaned over the years of observing what they NEED. Now we are
to determine what it is that they really WANT.
Why is it that the
Project has the responsibility of procuring candidate bankers?
potential clients have
asked this question. We offer these financing techniques into the
to multiply ourselves (increase our exposure). The offer is financial
We have been in this arena for many years & we have learned of
projects which have serious needs for an opportunity to use this type
collateral. For our assistance & services, they will work to
these candidate banker contacts. With this technique, the project will
have a very strong vehicle to present to prospective bankers. When you
pursue lenders with this Custom Presentation package, you have a unique
financing technique available which provides 100% cash collateral. With
this added clout, you have greater opportunities to develop &
candidate bankers than you had earlier with your conventional methods.
In reality, you have an opportunity to realize a net-net fallout of
from the proceeds of this sizable loan transaction where both sides of
the loan, principal & interest, is collateralized with vehicles
to the Lender. Your project can be funded & capitalized AND you
not have the burden of debt service! That’s why this is called a
When YOUR banker wants to do additional deals with Provider using this
method, a finder’s fee will be paid to you for initial efforts. Nobody
said this was easy, but it’s well worth it. So, we will continue to
with additional banks & bankers that you bring to the table through
your efforts. For this, the benefits are, to avail to you funding for
project & an on going finder’s fee when this banker want to
with multiple transactions. When we develop a banker & we continue
to do so, we don’t split it with anyone. If you can get your loan with
conventional bankers, then great!
really done one of these?
have personally been in
this type of business since 1967 & I learned long ago that about
of the information I possess is either discretionary or proprietary.
means this a secret or private intellectual data. I have also learned
experience that well over 50% of the types that become involved in this
type of business do not have the ethics or staying power required.
I have found that most “players” eventually will, directly or
circumvent to some degree. The short answer is simple to describe with
the following example. Hypothetically, we successfully closed your
yesterday through your banker and all is well. Everyone happily rode
into the sunset. Now, can any of us give out sensitive information
this transaction, especially names or phone numbers? NO. All parties
be a part to a very strong, air tight Non-circumvention, Non-divulge,
contract, if this were not the case, I could advertise bankers’ phone
and make my life very simple. There are a myriad of reasons why we are
prevented from discussing previous business & we must continue to
this proprietary information. We will all be silent after you close too.
Why doesn’t Provider use a bank already in place to save our time &
popular question, but I
think I covered it above. In years past, in an earlier version, we
the fallout 50/50 with the project because it was a “walk-away”. The
version was revised to the present structure as of April 1998, and you
will have to agree with me that this is much better. Bankers did not
over-standard fees. After all, they are always thinking about how much
they make and actually they should! This is why we have designed this
the way it is. Everyone must win or it will not work.
Why does Provider need our project and/or our bank contact(s)?
we don’t. We continue
to seek our own banker contacts. However, as explained above, you will
bring additional candidate banker(s) to the table. You will then
as outlined above.
does Provider need to do this transaction?
require that a legal project
be tied to this transaction because this keeps our placement legal.
the lender approves the project as an acceptable borrower, this means
the lender banker has completed their due diligence requirement &
makes it acceptable to us. This assures us that the project is legal.
we do not have to review or make a judgment on your business plan. We
not get involved with your project. Remember, we are not your venture
financial partners. They are the great white sharks; so do not compare
us to them, please.
Why does Provider
act like they are not interested in my project’s Business Plan, we
a lot of time and money to prepare it?
has been covered above.
We do not need to review your project in order to proceed. The bank
this function. We are certainly curious about your widget/deal, but we
do not review your Business Plan like all the others. I will have an
to preview it prior to closing.
If Provider is representing
large blocks of money, why does Provider require a fee for the form
years ago I learned
that this is a professional service, not unlike lawyers, surgeons,
etc. The ultimate goal is to close this transaction(s) because this is
where we all make our money. We do not know how successful your
and/or probes with bankers are going to be. Professional services are
free, if they are; then you should really worry about their quality. We
put forth our best efforts. This is evidenced by the time and research
supporting the material in these packages. If anyone thinks ill of this
offer, then stop reading right here. This offer is not meant for
But for some, this may be the answer to some very serious needs. We are
looking forward to the mutual benefits afforded in these techniques.
Custom Presentation will be the support you have needed as credit
for your loan application to bankers. The first impression is extremely
important. The preparation & processing takes over 7½ hours
to complete. Sometimes it takes longer, as the calculations are
It must be original, current, mathematically correct and stand up to
under a magnifying glass by experts in the bank, who are looking for
to shoot it down. Remember, they are bankers!
package the same as all the others out there . . .shabby?
all of the pages are
styled with your project name. We both want this financing technique to
impress the reader. This will demonstrate that you are very serious
your proposal. When this happens the door opens a little wider for you
to go forward. We are trying to get to first base & ultimately
not just up to bat. Never, ABSOLUTELY NEVER send this material to
by fax! Most paperwork sent via fax looks shabby. I do not tolerate
of this offer. A fax is abuse. I will withdraw this offer immediately
form AAA is the agreement
that authorizes Provider to offer you assistance.
charges will there be from Provider?
you request my travel
to some venue to assist you or to make the presentation to your
I am available for this. This is subject to my prior commitments. I
provide my travel parameters when I know where & when you need me
go. I would like as much lead-time as possible to set up my trip, but I
know very well that when a banker says they are interested (warm &
furry) that we do not want them to cool off. That’s just human nature
we want to move forward just as much as you do. When you return the
“Notification Letter” re-typed on your project letterhead, I will
if the bank(s) are acceptable and then advise you accordingly. This may
require me to travel and meet personally with your contacts at a bank.
The travel parameters under which I offer to meet with the banker(s)
be prepared and sent to you immediately for consideration. This will
an expense budget for your acceptance. The cost will depend on where in
this world I am going.
meant by “credit back to the payer at closing”?
will account for any
and all advance moneys paid to Curtis Rose, General Director (Offshore)
of Provider and credit back to the payer on the project side at
means that what ever amount you provide or advance to us to work on
transaction will be accounted for, totaled and a check will be cut back
to you (the payer) from Provider, immediately at closing. Note - there
commitment fee charged by Provider. There are only pre-arranged,
expenses, which have to be agreed to in advance, in writing.
the tax events tied to this type of transaction?
l am not a tax advisor!
However, there may be some view by the IRS that some taxes may be
down the road. Of course, the project will have to pay the capital
taxes on the profit earned, but I am sure you would welcome that
Should you direct this matter offshore, then there are some definite
But that is another subject. So seek your own expert tax advisors.
technique be applied to project applications other than
know that many needs can
benefit with this technique, such as; company expansion, merger, new
infusion, buy out of partner(s), startup, operating funds, inventions,
R&D, bailout of a troubled company or what ever needs money to pull
a deal together; as long as it is acceptable to the banker(s). This
it legal for us.
the sticky points to this proposal?
majority of the information
we have provided has been about the Interest Hedge. This is a method
to your Lender(s) to give them an income-generating vehicle using a
profit account portfolio. They can depend on vehicle instead of
the project to make payments. This is a 5X over-borrowing scenario. We
advocate Treasuries “only” because they are safe and the historical
since 1986 can be analyzed by the lender’s experts.
banker use a ‘roll program’ they already have?
If your Lender
does not understand securities or will not tap one of their own experts
in futures/options in the trading of a leveraged portfolio, then we
As the Use of Proceeds indicates, your lender can implement any other
vehicle that they accept, control & operate. This can be some type
0f ‘roll program’ they operate in the investment department of the bank
with proven experience of generating income on an annual basis.
A 10 to 1
leveraged portfolio has
to produce ONLY 4% in a profit account to pay all of your loan payments.
amount be allocated from the proceeds of the loan & who operates
Twenty five (25%) percent
of the loan amount will be pledged to the lender for the exclusive
of servicing your loan debt for ten years. Your banker will have a
contract let by a joint venture, pre-arranged by your project &
As the earnings (net profit after operator’s commissions & margin
are accrued through year into a custodial account at your lending bank,
the account is debited every twelve months by your banker for the loan
project cannot control what
the operators do; therefore, Projects are not responsible for the
What if the operator
of the portfolio (your. banker’s investment department) does not make
money to service the payments?
project cannot control/audit
how the portfolio is operated within the bank. It must be understood
to closing (under contract) that the project is released from all
of the annual interest only payments until all ten payments have been
& the loan is paid in full by the investment department in the
However, we are willing to increase this amount to accommodate the
level of comfort.
if the payment is not made by the hedge account, say in year number
five or whatever?
bank is in total control
of the hedge account and this is operated by the bank’s investment
so the Lender must depend on their expert’s performance for the full
Of course, the Investors are no longer involved with your transaction
does the Lending Bank have to generate with the portfolio to service
4% annual net-net!
this such a sticky point with the bankers?
is a innovative proposition
for your bankers to digest. Since this is not found in their policy
it is something that must be tested to prove. We need the banker that
look at this proposal with a positive attitude and look to see how they
can assist in putting this together. When they understand this
it will become the most secured loan they have in their files. This is
why it is designed to win-win-win! Again, we can’t say it enough, if
were not a win all around the table, it would not work. Your banker
dollar package is TOO BIG for our banker to consider!
is an over-borrowing
scenario, which is 5X the number you need to do your deal. This can
the doors off” some banks. Also, this may be over your banker’s “cap”
beyond their “pen-power”. We suggest that the bank proceed with a
transaction, which is adjusted down to a more comfortable number for
banker. Our priority is to provide all of the precedents needed by your
banker to accept the larger numbers. This may be referred to as a test,
a “Precedent Closing” or traunches. When they are motivated, we can
the numbers to suit. We make the one percent, so we are not afraid of
to the 25% margin deposit when the debt service is paid off
if it takes the full
amount has served the
exclusive purpose it was allocated to your bank for, so at this time,
lending bank has to relinquish this amount back to Provider.
when the Principal is due at end of year ten?
lending bank accepted
the pledged corpus of the “Special” ‘CDs and impounded this collateral
during the full term. The Investors and your Project contracted with
bank to pledge the CDs were “irretraceable and pledged irrevocably” to
the Lender as collateral for the principal of the loan. When the CD
matures in year ten, the bank repatriates/redeems them. In other words,
they dissolve because these “Special” CDs don’t have to be paid out
the corpus of the ‘CDs called during the term when they are held as
are known as zeros
until the time they mature. The value only becomes actual when redeemed
by the holder, which is your Lender Bank.
up-line bank is asking why they should do this for him?
This will depend on the
already established relationship that the smaller bank has with the
bank (its uncle bank). However, as an incentive to the bigger bank, a
of the 2% margin or the handling and the running of the 25% portfolio
or perhaps both, can be offered to the up-line bank.