Has Anyone Ever Utilized Senior Life Settlements (SLS) used as 100% Collateral
Has Anyone Ever Heard of or utilized Senior Life Settlements (SLS) used as 100% collateral?
This is what the Client has mapped out utilizing SLS- Do you believe a Bridge Lender or Do you know of a Bridge Lender who will Participate?
Senior Life Settlements-as 100% collateral
Collateral using senior life settlements as an institutional investment asset class, as a securitization facility for any business transactions bought at closing is a way of collateralizing any of our projects. The Explanation is below.
Various structural formats using the "collateral" exist, including 1) funding for an amount equal to the project requirements, 2) funding for an amount equal to the project requirements plus premium requirements, 3) funding for an amount equal to the project requirements, premiums, and interest requirements and/or debt service/operating costs, 4) funding for an amount equal to the project requirements as well as all other cash needs as well as total repayment of principal-all with no risk of loss of investment by the investor/lender.
BENEFITS TO PARTICPANTS
A- Issuer
1) Lower cost of financing
2) Faster funding
3) Lower or no equity "kickers"
B-Investment Bank
1) Significantly faster funding
2) More transactions completed per period
3) Ability to attract new clients
4) Higher fees, commissions and profits from "collateral"
C-Investor/Lender
1) Remove risk of loss of principal
2) Higher rate of return through participation in collateral
3) Lower reserves due to securitized feature
4) More investments due to lower reserves leading to higher investment income
$163M NEEDED FOR (Investment) - Primary lender will only loan LTV @ 25% of face value of $1.2B of Senior Life Settlements (SLS).
Step 1----Bridge lender Loans (Investment) $64M to purchase 1.2B of SLS
but keeps his loan and bought SLS in a mutually agreed upon escrow account until closing with Primary Lender.
(It takes 60 to 90 days to accumulate the SLS)
Step 2---(Primary Lender) loans $300M at closing against the 1.2B of SLS at LTV of 25% after 90 days.
$1,200,000,000 are held in a mutually agreed upon escrow account for (Primary Lender) as collateral for $300M loan.
Source of Funds:
$1,200,000,000 SLS needed to purchase with funds from Bridge Lender
-------times 25% LTV from (Primary Lender)
---$300,000,000 Monies from (Primary Lender) Loan
Step 3---At closing with (Primary Lender) Bridge lender is paid back its bridge loan and interest.
---$300,000,000 Loan Funds to (Investment) are used to cover:
1) (Investment) ------------------- $163,000,000 (To Build Investment)
2) Bridge Lender ---------------------64,000,000 (repay bridge loan)
3) Bridge Interest @25%----------16,000,000 (pay interest)
4) Pay SLS premiums/fees-------57,000,000
Total Use of Funds------------$ 300,000,000
Step 4---SLS of $1,200,000,000 stays in escrow account to pay principal
Return of Principal plus ROI
A) Could be liquidated at anytime to repay $300M loan plus interest.