Secured Asset Management Investment Program
Secured Asset Management Investment Program
Secured Asset Management Investment Program is an investment vehicle that allows companies or high net worth individuals (HNW) to leverage cash to receive up to 4 times the initial deposit. Funds can be used for start-ups, commercial real estate acquisitions and refinance, business acquisitions and expansions, etc.
A Secured Asset Management Investment Program Initial required underwriting documents are submitted to the lending institution. Once the loan is underwritten and proof of funds have been provided, the lender will issue a term sheet. Once the term sheet is executed by both parties, the leverage program begins.
The minimum initial investment (deposit) is $10 million in U.S. dollars. There is no maximum deposit. The borrower’s funds are deposited into a top 200 world bank through an AML (Anti-Money Laundering) and OFAC (Office of Foreign Asset Control) based compliant network of international lenders who are partnered with A+ rated international insurance carriers. In some circumstances, the borrower may keep the funds in their own bank account.
The bank will insure the funds via bonding through an insurance carrier. The principal investment remains blocked for a specified period in the investor's (or lender’s) bank. Ownership of the account remains with the investor, and funds blocked will not be moved, transferred or withdrawn during the period of blocking as specified. There are no liens and no mortgages on the borrower’s deposit. The deposit remains free of any encumbrances at all times.
At this point, the Bank, or trading desk working for the bank, will make trades utilizing the initial deposit. The instruments to be transacted under the BUY / SELL PROGRAM are fully negotiable bank instruments delivered unencumbered, free and clear of all liens, claims or restrictions. The instruments are debt obligations of the top two hundred (200) world banks in the form of Medium Term Bank Debentures of ten (10) years in length or Standby Letters of Credit of one year in length with no interest but at a discount from face value. These Bank Instruments conform in all respects with the Uniform Customs and Practice for Documentary Credits as set forth by the International Chamber of Commerce, Paris, France (ICC) in the latest edition of ICC Publication Number 400 (1983 Revision) and the newest implemented ICC Publication 500 (1995 Revision). It must be stressed that, before an instrument is purchased, a contract is already in place for the resale of the Bank Debenture Instrument. Consequently, the PROGRAMMER'S funds are never put at risk. More so, with the investor's funds which remain blocked in the investor's bank in the duration of the contract. The trust account will always contain funds or Bank Instruments of equal or greater value.
Essentially, the trader pools money and uses it to buy, and immediately sell, Medium Term Notes. These trades generate substantial profit. The profit is used to fund the loan. Some banks in the program will pay 3% to 7% annually on the initial deposit.
Note: These programs have been available, though not widely known for years. However, because of the extremely high minimum requirements to enter them, only a few could qualify. The minimums have been $50 to $100 million dollars previously. Only recently have the smaller minimums been available so that more can qualify. Individual programs can quickly become filled and are then closed to further investor participation. The international trading of these banking instruments is a privileged and highly lucrative profit source for participating banks, and as a result, these opportunities are not generally shared. The banks always employ the strictest non-disclosure and non-circumvention clause in trading contracts to ensure the confidentiality of the transactions, which are rigidly enforced. Participation is an insider privilege. As a result, virtually every contract involving one of these high-yield bank instruments contain explicit language forbidding the contracted parties from disclosing any aspect of the transactions for a period of five (5) years, typically.
Terms can vary depending on the loan and which program is utilized. They will be spelled out in the Term Sheet.
Loan: Up to 4x the initial deposit
Term: 1 to 10 years
Amortization: Up to 25 yrs
Rate: 3.5% to 4.0%
Recourse: No – It’s a non-recourse loan
Prepayment Penalty: No
Upfront Fee: Once the Term Sheet is executed, the Borrower will pay a $25,000 fee to cover the bank’s legal and trading fees.
Timing: Generally, the loan process takes 90 days to fund.
Funding: Depending on the program, loan proceeds can be paid out in one lump sum at funding, or in tranches over a 12 month period.
Required Information To Begin:
1. Proof of Funds showing initial deposit is ready to be deployed.
i) Letter from the equity investor pledging the 20% (if the deposit is provided by a 3rd party).
ii) Copy of borrower and equity investor’s passport (for anti‐money‐laundering protocols).
2. Know Your Customer (KYC) form – completed in full.
3. Project Business Plan and any supporting documentation.
4. Use of Funds/Drawdown Schedule (the proposed drawdown schedule must fit the program parameters).
5. Loan Application Form
i) If the applicant is a corporation or LLC, a copy of the “Articles of Incorporation” must be included.
ii) If the Applicant is a Corporation or LLC, a “Board Resolution” (stating that the signatory has the authority to act on behalf of the corporation).
6. “FAQ” document ‐ Initialed and signed.
7. Copy of Passport of Application Signatory.