USE CASE 2
Credit-Linked Note for end-borrower or intermediary
Overview
Rationale
Credit-Linked Notes (CLN) are securitized, tailored loans to an end-borrower. There is the possibility to add an intermediary borrower for hedging or tax reasons. The beneficiary pays via an issuer (TPB Issuer) an interest rate (coupon) to the investor, which can either be variable or fixes.
Product Inspirations
Real Estate Finance
CLN can be used to open up the real estate financing market (e.g., hotel financing) to a wide range of investors.
Trade Finance
CLN can be used to provide importer with liquidity, e.g., when an exporter requires an importer to make an advance payment.
Plant or Machine Finance
Financing the installation of solar parks. The coupon can then be made dependent on the profit of the solar parks.
USE CASE 2
Example
Rainforest Paraguay
ISIN: CH1168858194
This CLN aims at providing aSwiss-based firm a loan to buy rainforest in Paraguay. Under anew deforestation scheme of the Paraguayan government, the firm is paid for preserving the rainforest in the interest of fighting climate change.
The earnings from this deforestation scheme are returned to the investor through interest rates.
As such, this product not only creates an attractive and collateralized investment opportunity, which Digital Waves and its partners will make accessible through an investment vehicle with Swiss-ISIN, but also contributes to the environment.
USE CASE 2
Institutional Setup
- Notes
- Intermediary can be removed
- Management & Admin fees are paid from the interest on the loan, make sure that Interest is greater than coupon, in particular Interest = Coupon + Management fee + Admin fee
- The inapplicable fees are to be set to zero
- There might be more than one end borrower
- Product Sponsor, Product Manager and Product Distributor can all be different counter-parties or one counter-party
what makes us different
Why Choose Us?
Swiss Portfolio Management AG is a Swiss-based private financial intermediary regulated by Polyreg, a FINMA-recognized self-regulatory organization. We are a financial investment manager for the future economy, offering securitization platforms for traditional and innovative assets.