VALUE FIRST. VALUE FOR ALL!
The elements that comprise the securitization feature of a TrustLINKED PPM are:
The Trustee; and
The Special Assets.
The value is in the associated benefits of the securitization feature; the key value points are shown herein at FOR ISSUERS and FOR INVESTORS.
VALUE FIRST. VALUE FOR ALL!The Securitization for Issuers is as follows:
- The Trust: liability associated with principal loss is placed in a grantor Trust, and not tied to the company or its assets.
- The Trustee: compliance risks eliminated surrounding paperwork handling, investment tracking and reporting; and the Trustee is independent.
- The Special Assets: replaces the need for leveraging your personal or company collateral for fundraising purposes; and converts a 'high risk' investment into a 'low risk' investment. The Special Assets are A-rated, fixed-return assets not correlated with your company; they can't depreciate in value or fluctuate down; and they're not tied nor affected by systemic movements in stock, credit, commodity, political or real estate markets. Moreover, the Special Asset is a regulated security.
The Benefits to Issuers are as follows:
- You get a debt-repayment mechanism that removes the need to repay or service debt;
- You get an automatic buyback (or buyout) mechanism (for straight equity offerings only);
- You get a drastically reduced cost of fundraise;
- You keep creative and financial control;
- You get an investment-matching system through the Trust;
- You get a sophisticated structured capital method;
- You receive a substantial amount of cash from the Trust upon a certain milestone being reached for your investors.
VALUE FIRST. VALUE FOR ALL!The Securitization for Investors is as follows:
- The Trust: investors become primary beneficiaries of the 'special purpose' Trust; the investments themselves are deposited into the Trust and not into your company's bank account.
- The Trustee: transactions are authenticated by a certified and independent Trustee; the return of the signed paperwork is handled by the Trustee which strengthens compliance.
- The Special Assets: protect against loss of principal. The Special Assets are A-rated, fixed-return assets not correlated with the company; they can't depreciate in value nor fluctuate down; and they're not tied nor affected by systemic movements in stock, credit, commodity, political or real estate markets. Moreover, the Special Asset is a regulated security.
The Benefits to Investors are as follows:
- They write their check directly to the Trust and not to you;
- They receive authenticated paperwork from the Trustee;
- They get an independent Trustee involved in the process;
- They get to be a primary beneficiary of the Trust;
- They are aligned with a Trust that is bankruptcy remote;
- They reserve the right to convert from their debt position (or accept a buyout offer for their 'equity') or not – it's their choice;
- They know their principal is secured in case you fail.
Why Rule 506
Why Raise Under Exemption Regulation D., Rule 506?Main Reason: It is the most popular of exemptions that has been widely used by U.S. and foreign issuers to raise capital without registering their securities offerings; and it's the preferred exemption for TrustLinked PPMs. It's also the fastest, easiest and least expensive to prepare and launch of all the available alternatives.
"In 2011, the estimated amount of capital raised in these types of exempt offerings was just over $1 trillion, which is comparable to the amount of capital raised in registered offerings during this same period." -Mary Schapiro, Securities & Exchange Commission Chairwoman, on 8/30/2012
Biggest Reason: Once the SEC lifts the highly-anticipated and much needed ban on general solicitations and advertising related to private offerings, you will be able to solicit the general public and advertise using your TrustLinked PPM -- across any, all and every known and unknown media in the Universe. Regulation D., Rule 506 will permit you to do these actions.