Lender will Fund 100% of the Face Amount of Bank Instruments. They will lend against Certificate of Deposits, Bank Guarantees, Medium Term Notes, Treasury Bills, and Standby Letter of Credit. A bank to bank phone call will be done first to verify capacity on both sides so you know right away on the bank's ability to fund. Once the call is completed, then a contract is issued. When the contract is executed, they can fund in one week or less. There are no upfront fees, no prepay penalty, no lien on project, no underwriting other than the verification of the instruments. Note: They will not lend against leased instruments as the instrument is the only collateral for the loan and it must be cashable in the event of default.
Transaction Process Summary
The fund is a private U.S. source lender with several billion dollars in verifiable closings.
- All transactions must have a “sum and date certain guarantee” issued by top 25 banks.
- The instrument can not be leased or encumbered so Lender can be fully repaid directly in first position if necessary. Loan proceeds may be used for any purpose - personal or business.
- Minimum transaction size: $1 million. Initial maximum size $100 million, possible $1 billion+.
- APR 5% - 9% fixed interest only. Rate based on transaction size and strength.
- Funding Term: 1 year minimum for $100M+. 2 years minimum for less than $100M. Up to ten years balloon payment available with deferred principal and interest calculated at semi-annual compounded rate of 5% - 9%, based on transaction size and strength.
- In exchange for equity share in project, interest rate can be reduced by 1 - 2 points.
- Memorandum of Understanding issued within 24–72 hours of receiving completed information.
- Financing structure options: Principal & Interest, Interest only, Balloon payment with full deferment of principal and interest for up to ten years or other customized payment plans possible.
- Lender does not issue a letter of intent or commitment letter, instead a contract will be issued once the borrower’s capacity to provide the guarantee has been verified.
- Success fee of between 2–4% plus participation shares/points, based on the size of transaction.
Financial institution or corporate guarantees
- Guarantor must have a presence in United States.
- Instruments issued by any global HSBC office would be acceptable so long as the issuing bank identifies their US counterpart at HSBC in New York.
- Corporate guarantees must have an investment grade rating (BBB+ or better, according to S&P).
- Guarantees must be secured by LOC, COD or approved collateral/assets assignments.
- Full disclosure as to origin and owner of the underlying funds or assets backing the financial guarantee or instrument.
For all banking instruments used in transaction
- Borrower provides Lender with bank representative's contact information and notifies the bank of Lender's intention to provide the loan against a secured instrument issued by the bank.
- Lender provides Borrower with bank reference to confirm Lender's capacity to fund.
- Bank provides Lender with sample draft of instrument.
- Complete due diligence and finalized terms of the loan agreement with the borrower.
- Loan agreement and other supporting legal documentations are drawn and submitted to Borrower for conditional approval.
- Closing document drafts and legal opinions to be reviewed by both attorneys and mutually approved.
- Transaction closing date to be scheduled.
Closing process (simultaneous escrow)
- Instrument is drawn in favor of escrow agent with Lender or its assigns as beneficiary.
- Lender will fund borrower’s escrow account.
Required Information for Issuing a Memorandum of Understanding (Term Sheet):
- Transaction Summary: size, terms and structure desired for use of funds. Names of principals involved in the transaction with contact information and biographies.
- Contact information: US legal counsel or law firm representing the borrower.
- Contact information: Bank representative and/or guarantor.
(Banker/Guarantor can furnish a Letter of Intent or provide a verbal confirmation to verify borrower’s capacity to secure the guarantee).
Last Updated on Monday, 19 December 2011 00:50