Transcript INTERNATIONAL STRUCTURED FINANCE SOLUTIONS Insurance-Linked Capitalization Arbitrage Program (iCAP) www.iCapVentures.com Structured Finance Notes & Bonds  Information in this presentation is subject to.

INTERNATIONAL STRUCTURED FINANCE SOLUTIONS
Insurance-Linked Capitalization Arbitrage Program (iCAP)
www.iCapVentures.com
Structured Finance Notes & Bonds
 Information in this presentation is subject to change without notice
 All calculations and timeframes are approximations.
 Ratings are by Standard & Poor or Moody’s
 The information herein shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of securities
in any state in which such offer, solicitation or sale is not authorized.
An offering is made solely by the prospectus to accredited investors.
The reader of this information is advised to consult an attorney and
perform adequate due diligence before making any decisions.
 Minimum Loan Amount $5M – Max Loan Amount $100M (smaller
projects will require combining with others to equal a total of $100M
– multiple bonds per project are feasible).
 We participate in 10% to 20% of Equity
 Capital is disbursed in tranches per schedule, with quarterly audits
Qualifications & Requirements
 Project/Venture must meet some or all of these requirements to
apply with iCAP:
 Purpose – Creates or advances new &/or green technology, jobs, industry,
real estate (limited new construction), film, for-profit humanitarian,
others may be considered on their merits and business model
 Profit Potential – Project must be able to pay minimum of 10% per year
of original loan amount, year 3 - 10 (quarterly starting 27th month).
 Management – Project/venture sponsors must be seasoned and
experienced in their business sector.
 Proof of Funds – $5,000 per $1M of required capitalization, for
underwriting, legal, due diligence and processing of loan application.
 Application must contain:
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Business Executive Summary
Business Plan – project details, mgmnt., market & intellectual properties
Ten year Pro forma
Client/borrower/issuer information sheet
Process, Approval & Use of Funds
 Submit Application and Required Client/Borrower Deliverables
 iCAP Due Diligence and Pre-approval or Non-approval
 If Letter of Pre-approval Issued with Preliminary Term Sheet, Initial
Transaction Fee is Required for Loan Processing
 Repackaging, Legal, Underwriting, Trust Indenture, Collateral Bond
Reservation, Escrow Account Established, Final Term Sheet Issued
 Estimates of Initial Items to be Paid from Escrow Account:
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Institutional Investor/Lender Reservation Fee
$ 45,000
Introducing Broker
$ 50,000
Collateral Underwriting Reservation/Retainer
$ 142,500
Legal
$ 45,000
Note Assignment Fee
$ 30,000
Indentured Trust, Issuing Agent, Consulting Fees $ 187,500
TOTAL
$ 500,000
Timeline & Loan/Bond Processing Cycle
iCAP
Est.
Timeline
18 to 22
weeks
$150,000
Issuing
Agent &
Consulting
Fees
Est.
Timeline
14 to 18
weeks
$30,000
Note
Assignment
Fee
Excess funds
released to
Project per
Disbursement
Schedule
MTN Funds released
for acquisition of
Insurance-Linked
Collateral
and A+ Rated
reinsurance binder
Est.
Timeline
8 to 12
weeks
 Secures Institutional
Investor/Lender Partners
 Arranges A Rated
Collateral Guarantee
Fund
 Lends Net Proceeds to
Project & Provides TPA
 Retains % of Equity
Example $100M Loan
$80M Net Proceeds
START
iCAP receives &
approves Project(s)
BP, Pro forma and
Application
Reserve Account Established for Interest,
Premium Payments & Maint. Fees
First 2-Yrs Principal is pre-paid. Project pays 10% of
Gross Loan Amount yrs 3 – 10 to equal total
Principal repayment only
Project underwritten
& attached to MTN
Insurance-Linked
Asset Collateral
Identified & reinsurance
Committed
$45,000 Legal
$37,500 Indentured Trust
Timeline
Starts
iCAP secures
MTN & Indenture
Trust from Partner
Institutional
Investor/lender
$142,500 Collateral Retainer
Establish Escrow
Account – Fees
to be expensed
as incurred
2 to 6
weeks per
# of
projects
required
Est. from Escrow:
$45,000 MTN Reservation
$50,000 Introducing Broker
Loan Cost Structure
Insurance-Linked Capitalization
Arbitrage Program (iCAP)
Basic Structure
iCAP
Ventures
Syndication of
Institutional
Investors/
Lenders
Principal
& Interest
Payments
Indenture
Trust
Net Balance of
Loan to Project
ICIB = International Capital Investment Bank
TPA = Third Party Administrator
$577M
Gross Loan
Funds Required
$xxxM
Negotiates Terms &
Invests in re-insured
Life Settlement Fund
$80M
Project
or Venture Prin. Payments
Borrower
ICIB
&
TPA
Premium Payments
$80M
$497M
Set Aside Funds are
Administrated by TPA
for payments due
participating parties
& invests funds
standing still
Return of 100%+ of
Principal End of Term
Set Aside Fund
Prin. & Interest,
Premiums,
Maint/Admin fees
$581M
Insurance-Linked Asset Securitization Diagram
Policyholders
Custodian,
Trustee,
Escrow Agent
Collateral
Manager
Actuaries
Cash to Providers
for Providers
Broker
Provider
Broker
Provider
Broker
Provider
Primary
Medical
Examiner
Counsel or Adviser
to Check
Inconsistency
Between Medical
Records & Initial
Insurance
Application
Sale of Policies
Pursuant to
Origination Agreements
Duplicate
Medical
Examiner
State & Local
Regulatory
Counsel – for True
Sale Transfer &
Compliance
Confirmation
Issuer
(Bankruptcy
Remote Trust)
Cash
Transfer
Reinsurance
Guarantee
for Longevity
Risk
Liquidity
Facility
Tracking
Agent
Tax
Advisors/
Auditors
Interest &
Principal
Investors
Private
Placement
Agent
ICIB Invests $xxxM through its
Professional Fund Administrator
(“PFA”)
Funds are Swift transferred to
ICIB/PFA established
International Bank
Fund Participant
Bank transaction
PFA as Escrow Agent establishes
Trust for transaction & Admin. of
funds
A+ Rated Wrap
Reinsurance
Escrow Agent
Trust company
Payment to cobeneficiary of policy
yes
Reinsurance
company pays
Premium (admin fees
for fund) 1st yr & buffer
 PFA facilitates rated Reinsurance
 Establishes legal docs to transfer
beneficial interest in policies
 Manages fund & premiums
Fund Administrator
no
10-Yr term
expired?
Asset-Class
Collateral Securitization
A+ Rated Reinsured
Insurance-Linked
Longevity Product
no
Insured
person dies?
yes
Insurance company
pays
Fund Participant
10-Yr
payment?
ICIB makes premium payments
after yrs 1 & 2
no
Bank transaction by
participant (premium)
yes
Premium
complied with
 Reinsurance pays end of term
Balance remaining
 Life Insurer pays death benefits
 Premiums maintained to
term on un-matured policies
At end of Term PFA Fund pays out balance of any un-matured policies so
the total combined “guaranteed” return from this Fund equals $581M
Benefits
 Borrower:
 100% Loans Possible
 No Collateral Requirements Possible
 No Personal Recourse or Guarantees
 Principal Repayment Only (no interest loan)
 First 2 Yrs Pre-paid (no additional payments due until 27th month)
 Borrower Retains up to 90% of Equity
 Most Sectors Considered in Free-World
 Smaller Loans Considered if Combined with Other Project Funding
 Low Entry Cost ($5K per Million) & 90% Refundable
 Application Approval to Funding 90 to 120 Days
 Pre-approval Process in 7 to 10 Business Days
Summary & Contact
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Funding Limits - $5M - $100M (more if multiple Bonds used)
120-180 day process
$5K per $1M Initial Underwriting Cost
1st 2-yrs Principal pre-paid & Prin.
only payments yrs 3-10
 Requirements:
 Executive Summary
 Business Plan
 10 Yr Pro forma
 Client Application
 Experienced Management
 10% - 20% Equity
Contact: Jim Nash (949) 485-5252 [email protected]
Dan Somers (949) 412-8884 [email protected]