As you know we work on a priority/non-priority basis which is explained in detail on our websites:
Here are the next three calls:
August 3, 2011: Wednesday Weekly Conference Call Week 30: Small Cap Programs $50k to $5m, Project Funding, and More
August 10, 2011 Wednesday Weekly Conference Call Week 32: Small Cap Programs $50k to $5m, Project Funding, and More
This is the program Ali mentioned during Wednesday’s Live Call. He has brought two clients through this process at this time.
- PRESENTATION OF OUR PROGRAM FOR BRIDGING FINANCE WHEN YOU WISH TO DISCOUNT OR PLEDGE THE INSTRUMENT WITH OUR OWN BANKERS
If you do not have sufficient cash to enter into any of our main programs for leasing or buying bank debt instruments drawn on major banks or even if you wish to enter into a loan program and need capital to pay for your setting up fees, this program is especially made for you.
If you have no connections with banks or financial institutions that could monetize any of the bank instruments you would want to lease then this program is tailor made for you.
We offer to cause some of our small European Banks to issue leased 90 day Letters of Credit or Standby Letters of Credit in your favor starting as low as €/USD100,000.00 face value instruments or more to be discounted by our own banks, finance houses, lending institutions etc…
Verbiage of Instrument: The desired and acceptable verbiage of the instrument is included and is made a part of your “Leasing and Bridging Finance Agreement”.
Menu of Banks: At the time of application we will provide you with the name of the issuing bank. The issuing banks are BBB rated European Banks.
Term of the Instruments: Our bridging loan bank instruments may be leased for a term of ninety days
Minimum Face Value Amount: The minimum face value amount is One Hundred Thousand Euros or United States Dollars (€/USD100, 000.00).
Leasing fees: The leasing fees for our instruments amount to ten per cent (10%) of face value of the leased instrument.
General procedure: 1°) You must fill in an application form for the bridging finance module along with the required accompanying documents.
2°) We send you the “Leasing and Bridging Finance Agreement” to be executed by both parties.
3°) Both parties execute the agreement.
4°) We then send you the contract of the discounter to be signed between you and the discounters.
5°) We then send you our invoice for the leasing fees.
6°) Once fees are paid by SWIFT MT103 we will cause the instrument to be issued within five banking days from receipt of funds on our account.
7°) The instrument is thereafter sent on your behalf to the bank of the Discounter by SWIFT MT760.
8°) We email you a copy of the SWIFT MT760 for your files.
9°) Seven to Fifteen calendar days later you receive the proceeds of the discounting on your account.
10°) Steps 2 to 9 can be repeated thereafter.
nk courier (if required);
- OUR TERMS ARE NON NEGOTIABLE
We are not opened to any changes in our proposed procedure.
Should you have any additional queries do not hesitate to email us at: email@example.com
FREQUENTLY ASKED QUESTIONS (FAQ)
AT THE TIME OF BRIDGING FINANCE
1°) Why are you are offering short term leased bank instruments from smaller banks, less well rated than your usual top ten world banks?
Is all about financially empowering its clients (the rich and the not so rich!).
We can do that by providing them with financial tools in alignment with their own financial possibilities.
Because one needs money to make money we believe that providing a way for our clients to obtain the much needed seed capital to be able to enter into our various financial modules is one of our goals, obligations and duties.
So we have moved the necessary assets and funds in smaller banks to be able to cause instruments with face value amounts as low as USD100, 000.00 to be issued.
These instruments (SBLCs) rated BBB are then monetized through various professional discounters at ratios ranging from 45 to 65% of face value.
Large banks “A or better” rated are absolutely not interested in issuing such low denomination instruments.
We have already had a hard time talking them into issuing anything as low as ten million in face value amounts that attempting to go just a fraction lower would have resulted impossible.
Because discounters perceive these small European Banks as a long time risk we obtain the highest possible discounting rates by causing these banks to issue short term instrument such as 90day SBLCs.
Because we do not wish to bore you with legal and technical information you only need to know that banks perceive the format of an SBLC as best suited at the time of collaterizing lines of credit.
This is the reason why we have included 90 day SBLCs into our bridging finance module.
The idea is to provide our clients with the means and the ability to raise funds quickly to the approximate level of USD/€1M in order to be able to take complete advantage of most of our financial modules.
2°) Are you able to cause one of your Prime Banks to come out with an irrevocable and unconditional bank commitment letter to deliver the desired 90day SBLCs in favor of your clients before leasing fees are being paid to you?
A Prime Bank deals and speaks with other Prime Banks.
Prime Banks do not get involved or do not make commitments for and on behalf of much smaller banks especially when they are only BBB rated.
On top of that Prime Banks are expensive to use.
Assuming it was at all possible it would defeat the entire purpose; the cost of the instruments would soar and therefore become too expensive to use.
Because the cash outlay can be as low as USD10, 000.00 we believe clients can take a leap of faith by entrusting us with their leasing fees before we deliver.
3°) This bridging finance module is quite expensive. Don’t you think people will think twice before applying for bridging finance because of that?
In our document entitled “BRIDGING FINANCE IN SHORT” we show how, by monetizing a series of 90day SBLCs, one can finally obtain the resources to cause a five year top ten world bank, bank guarantee to be issued.
We have all gone to our calculating machines and discovered that in this particular case the overall cost of finance for this five year loan was just over 10%!
I believe every one interested must do his math’s and see whether or not this bridging module is fit for his needs or not!
4°) This bridging financing program starts by using the ability that has to cause a series of 90day SBLCs to be issued and further monetized. We also know how crucial it is to be able to quickly monetize larger instruments later in the program so one can successfully lower the overall cost of borrowings. Can help us quickly monetize these larger denomination bank debt instruments?
We offer, in one of our modules to lend money against acceptable bank instruments.
For borrowers who believe this option is unwarranted because not yet tested, or because they are fearful that, at time of issuance of larger denomination instruments, we might not be in a position (out of our menu of banks) to supply them with paper coming from the specific issuing bank their credit line bank is requesting, we are offering them a safety net.
We have the ability to cause any of our top world banks to issue Medium Term Notes or Bonds to be delivered to our clients banking coordinates.
Once on account, these bank instruments can be monetized within three days.
5°) You mean to say you can have an instrument of that size monetized without even moving it from the client’s account?
Yes. That is correct.
We have access to at least eight repo desks of major banks that will Repurchase these instruments within a matter of hours.
6°) What does the word Repo stand for?
Repo’ is the generic term for repurchase agreements (also known as ‘classic repos’) and buy/sell-backs.
7°) Do I have to take your word for this or is there any way I can verify this information beforehand?
If you type the two words “Repurchase Agreement” and conduct a research on the internet you will find a great deal of information on the subject.
We will have your bank officer contacted by one of our bankers in order for you to sign a “Global Master Repurchase Agreement (GMRA)” for the security held on account.
The monetization of the instrument will happen very quickly thereafter.
A Repurchase agreement, also known as a Repo, RP, or Sale and Repurchase Agreement, is the sale of securities together with an agreement for the seller to buy back the securities at a later date. The repurchase price will be greater than the original sale price, the difference effectively representing interest, sometimes called the repo rate. The party who originally buys the securities effectively acts as a lender. The original seller is effectively acting as a borrower, using their security as collateral for a secured cash loan at a fixed rate of interest.
A repo is equivalent to a cash transaction combined with a forward contract. The cash transaction results in transfer of money to the borrower in exchange for legal transfer of the security to the lender, while the forward contract ensures repayment of the loan to the lender and return of the collateral of the borrower. The difference between the forward price and the spot price is effectively the interest on the loan while the settlement date of the forward contract is the maturity date of the loan.
A repo is economically similar to a secured loan, with the buyer (effectively the lender or investor) receiving securities as collateral to protect against default of the seller – the party who initially sells the securities being effectively the borrower. Almost any security may be employed in a repo, though practically speaking highly liquid securities are preferred because they are more easily disposed of in the event of a default and, more importantly, they can be easily secured in the open market where the buyer has created a short position in the repo security through a reverse repo and market sale; by the same token, illiquid securities are discouraged. Treasury or Government bills, corporate and Treasury/Government bonds, and stocks may all be used as “collateral” in a repo transaction. Unlike a secured loan, however, legal title to the securities clearly passes from the seller to the buyer. Coupons (installment payments that are payable to the owner of the securities) which are paid while the repo buyer owns the securities are, in fact, usually passed directly onto the repo seller. This might seem counterintuitive, as the ownership of the collateral technically rests with the buyer during the repo agreement. It is possible to instead pass on the coupon by altering the cash paid at the end of the agreement, though this is more typical of Sell/Buy Backs.
Although the underlying nature of the transaction is that of a loan, the terminology differs from that used when talking of loans because the seller does actually repurchase the legal ownership of the securities from the buyer at the end of the agreement. So, although the actual effect of the whole transaction is identical to a cash loan, in using the “repurchase” terminology, the emphasis is placed upon the current legal ownership of the collateral securities by the respective parties. That said, one of the most important aspects of repos is that they are legally recognized as a single transaction (especially important in the event of counterparty insolvency) but do not count as a disposal and a repurchase for tax purposes.
8°) If I enter into a Repurchase Agreement with any of the financial institutions you recommend, how can I satisfy my obligation of having to return the instrument to the issuing bank fifteen days prior to maturity date and still raise a loan against this bank debt instrument?
It is quite simple.
The “Global Master Repurchase Agreement (GMRA)” you will be invited to sign is a standardized contract.
This Agreement has been produced by The Bond Market Association (“TBMA”) and the International Securities Market Association (“ISMA”). The Agreement has been prepared as a standard form.
We recommend you visit the websites of the “Bond Market Association” (New York, Washington, London) www.bondmarkets.com and of the International Securities Markets Association (Rigistrasse 60, P.O. Box, CH-8033, Zürich, Switzerland) www.isma.org to learn more about this forty page long agreement.
Entering into a repurchase agreement enables you to specifically repurchase your leased bank instrument before its maturity date and return it to the issuing bank.
9°) What are the additional advantages of entering into a Repurchase Agreement?
Because we are able to cause instruments to be issued with accompanying interest coupons, we can achieve very high lending ratios at the time of entering into a repurchase instrument.
You can discount the future interest coupons of the instrument and get a very high lending ratio from the banking institution.
You can make your “Global Master Repurchase Agreement (GMRA)” a recourse or non recourse agreement.
The price at which an asset is repurchased in a repo is equal to the price at which it was sold plus an amount of interest for the use of the cash. The amount of interest is calculated from a market-determined interest rate called the repo rate. Repo rates are lower than deposit rates like LIBOR and EURIBOR because lending cash through a repo is, by virtue of the collateral, less risky than making an unsecured loan. If an asset is strongly in demand, dealers may be willing to offer cheap cash to get hold of it in the repo market (repo rates can fall to zero or even go negative). When this happens to an asset, it is said to be special. In contrast, the normal repo rate is called the GC or general collateral rate (because there is nothing ‘special’ about the asset).
Because repo is a safer way to lend cash, lenders are willing to lend more. Cheapness and the ability to borrow more are the key attractions of repo for borrowers.
The advantage of repo for lenders is of course lower credit risk. In addition, because repo is less risky, regulations such as the Basle Accords and CAD require institutions lending through repo to hold less regulatory risk capital than unsecured lending. Consequently, there has been a major shift in liquidity from deposit markets to repo over the last 10 years.
10°) How familiar are banks with Repurchase Agreements?
You need to understand that all banks refinance their Repurchase Agreements through their respective Central Banks.
The banks would rather provide you with credit lines before promoting a Repo transaction. Simply because they earn more money that way!
Generally, and in exchange for the facilities extended, the credit line banks impose that you to let them manage the largest possible proportion of your credit funds by lowering their lending ratios.
A repo will provide you with a much higher lending ratio and a much cheaper borrowing rate.
11°) How can raising funds that way be made the least expensive possible?
The minimum times one uses 90 day leased SBLCs to raise funds the better.
If it is true that one can successfully implement this leasing bridging finance option by causing SBLCs with face value amounts as low as USD100,000.00 to be issued to start with, it is equally true that the higher the face value amount of the first SBLC to be monetized the better.
After all, the 90 day SBLCs only constitute a mean to an end: that is to say raise sufficient funds to be able to lease one or more bank debt instruments of a minimum face value amount of ten million.
Therefore in order to avoid going through too many funding cycles using 90 day SBLCs one should start this program with the largest possible face value amount 90 day SBLC.
12°) Why can’t I discount the SBLCs and the bank guarantees all on my own by using my contacts and introductions to banks?
Any client or borrower can choose to monetize his leased bank debt instruments where and with whom he wishes to.
But one must always remain aware of the constant changes introduced by the regulators in this industry.
For example, and from now on, in Europe, any applicant causing a bank instrument to be issued and further discounted must produce at least three sets of audited accounts in order for these bank instruments to be discounted or monetized by the receiving bank.
In addition to that, the issuing banks must declare and produce copies of the assets and funds that have been pledged in their favor in order for these instruments to be issued.
All that information must be forwarded to the discounting bank via the central banks and copied for review and examination by the various national money laundering agencies implicated and concerned.
Therefore in order to monetize bank instruments issued by European banks in Europe one is looking at a due diligence and verification timeframe of three months before funds could start being made available to any of our clients.
This is why, our issuing banks for the 90 day SBLCs being European, the financial institutions monetizing these instruments operate from banks located either in the United States of America, Singapore, Kuala Lumpur, Hong Kong or Dubai.
We therefore advise any of our borrowers or applicants to be extremely cautious and careful at the time of engaging in this leasing and bridging finance module without our involvement and know how.
Ninety percent of efforts must be devoted to preparation, and ten percent to execution.
At work very hard to be best prepared.
13°) How many discounters do you have at hand to implement this program?
We are currently negotiating discounting agreements with three financial institutions that have already accepted our small European banks as issuing banks.
We also believe we will be invited by one of our associates to use an additional discounter for the 90 day SBLCs in the very near future.
14°) Are the new rules you refer to in item 12 applicable to MTNs and Bonds to be possibly issued by any of your top ten world banks with the view of entering into a Repurchase Agreement?
The one to ten years MTNs or Bonds we would possibly cause to be issued by any of our top ten world banks to be further repurchased in Europe would have to be issued by non-European banks in order to avoid introducing any delays in the monetization process.
We have two non-European issuing banks that are part of the top ten world banks we plan to use in these sets of circumstances.
15°) Because your issuing banks for 90 day SBLCs are small BBB rated European Banks, don’t you believe the lines your discounters have available for these banks in their books are quite limited?
Subsequently don’t you think it will take only a small number of transactions involving these banks as issuers to cause these lines to be filled and extinguished?
You have a point.
This is why we have looked at multiplying the number of discounters in order to better service our clients both in quality and in quantity.
On the other hand, because we are using 90day SBLCs, these lines stand to be freed very quickly from one client to another.
We do not believe it will be a problem.
16°) Aren’t you afraid that someone unscrupulous and dishonest will come one day and will raise funds through the issuance of a series of 90 day leased SBLCs and possibly of one or more additional leased five to ten year guarantees with the intention of vanishing with the money and never fulfilling his obligations?
At the time of issuance and monetization of a minimum five to ten year ten million face value instrument we do force each and every borrower to post the necessary funds with the issuing banks for the 90 day SBLCs to be paid for at maturity.
As for the larger instruments issued in the face value of ten million or more, we urge the clients, who believe they are going to default on their financial obligations, to get in touch with us so we can organize a special placement program in order to provide them with the means to pay their loans back and return the leased instruments unencumbered and free of any liens to the issuing banks.
Even if this means we have to cause an additional bank instrument to be issued and placed in a special private placement for that very purpose we will do it working hand in hand with our client.
We therefore urge everyone who wishes to enter into this program to work with us all the way, and to be truthful and honest from start to finish.
Joseph P. Tufo, President
Referral Key: http://www.referralkey.com/joetufo
Google Profile: http://www.google.com/profiles/jptufo
You are welcome to participate in future Wednesday weekly conference calls.
August 3, 2011: Wednesday Weekly Conference Call Week 31: Small Cap Programs $50k to $5m, Project Funding, and More
August 10, 2011 Wednesday Weekly Conference Call Week 32: Small Cap Programs $50k to $5m, Project Funding, and More
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ASSET MONETIZING-PAPER ASSETS/CMO’s/BOND’s/CD’s/TREASURIES/ MTN’s/STOCKS/NOTES
T-STRIPS-MTN’S-BG’S-MANAGED TRADE-BUY/SELL-PPP-TRADING PLATFORMS
100% COMMERCIAL FUNDING-JOINT VENTURE- NO LOAN TO REPAY-TRUE JV
HIGH YIELD PRIVATE PLACEMENT PROGRAMS-TRADE PLATFORMS
FINANCIAL INSTRUMENTS PURCHASE-T-STRIPS-MTN’S-BG’S