Use Case - Private Loans

Private loans can be securitized into any type of bond, including convertibles or a CLN. This is a highly efficient way to access institutional or other fixed-income investors worldwide. With a securitized product you can turn an inflexible private loan into a note that can be settled within the broader financial market. You would give also the opportunity for investors to subscribe and redeem the loan in a more efficient way.

Case Study 

Problem: Very often companies seek additional capital to fund various sorts of projects. Examples include financing a new market entry, early-stage working capital, a new product line, etc. The traditional financing through a bank loan, if provided at all, is typically rather expensive and inflexible. Setting up several individual private loan contracts with friends, family or an individual’s further associated network is highly cumbersome administratively and resource intensive.

Solution: With a CLN, a private company can very efficiently source funding from various known, qualified investors. The borrower, which is the private company in this case seeking to finance a certain project, has the following advantages: 

• It can negotiate terms with its investors directly.

• Financing costs are typically significantly lower compared to traditional financing methods.  

• With a marketable CLN, investors can easily finance the borrower while the borrower formally interacts solely with the lender (the CLN).  

• Investors can track their investment in the custody account of their house bank. 

• With a securitized instrument that can be settled, investors have the chance to easily redeem parts of the loan. 

• Furthermore, you can increase the loan amount easily if you find additional investors with a reopening clause. 

Simplified Example: A CLN to Finance a Private Loan

1. Qualified investors instruct their custody bank to buy the CLN. Through the Swiss ISIN their custody bank gets in touch with ISP. 

2. Through this buy transaction called delivery-versus-payment (DvP), the investor receives units of the CLN booked into their custody account while sending the funding onto the product’s ISP account. 

3. As soon as cash has arrived at ISP, we, in our role as paying agent, transfer the cash proceeds to the Borrower’s bank account so they can start financing the project. 

Why work with ISP:

• Experience -> More than 2'500 ISINs serviced.

• Expertise -> We have an extensive knowledge of debt instruments. Our experts can understand the needs of our clients and their unique financing needs. Any special characteristics can be implemented in your own CLN.

• Securities Firm -> We are a long standing, reputable Swiss securities firm with a broad team of products & securitization experts.

• Skills -> Our highly skilled relationship managers, product specialists and traders are accompanied by experts, within onboarding, legal & compliance and many more fields.

• Trading Lines -> 700+ financial institutions have open trading lines with us, allowing our clients numerous advantages.

• Partners -> In addition to our inhouse trading services, our clients are also provided with access to trading via several prime brokers in the market.

• Flexibility -> We always put our clients and their needs first, we are highly flexible and can accommodate any needs.

Other Securitization Fields:

Securitization is a highly diverse field with countless opportunities. Apart from Private Equity, Private Funds, Private Loans, Real Estate, Digital Assets, ISP is next to you to tackle any securitization need you might have, such as Green Bonds, Art, IP, and other Tangible and Intangible Assets. 

Green Bonds 

Institutional investors can securitize their investment strategy or assets in a security. The security can apply for a green bond certification via partner service providers. 

Art, IP, and other Tangible and Intangible Assets 

Art has become increasingly popular as an asset class in the investment landscape. 

Investment opportunities in art, collection items or intellectual property (IP), such as brand royalties, music or film rights are typically illiquid and difficult to access.   

Shariah-Compliant Products 

An innovative and cost-efficient solution for professional clients seeking wealth management strategies aligned with Islamic principles.   

So far, AMCs and their unique, cost-efficient structure have had limited access to the world of Islamic Finance, despite the fact that they have been widely used by professional asset managers since the early 2000s.  

While early-moving banks have only recently started to offer Shariah-compliant AMCs, we,  in collaboration with Amanie Advisors offer a solution without banks’ traditional counterparty risk, resulting in stability and security.