Post on 16-Dec-2015
State of the UnionJobs-Jobs-Jobs
Unemployment @ 9.8% and likely to stay at that level for some time (20M +++) New Jobs moving overseas
Federal Deficit’s increasing Government bail-outs costing taxpayers
billions Bank failures/VC firms capital frozen Healthcare costly and future uncertain Capital for start-ups and expansion capital
unavailable or too costly to enable effective businesses to utilize
Private Market Solution
1. Monetization financing Private investors provide funding
2. Government guarantee (Replaces privately arranged guarantee)
Potential link to job creation and taxes Potential to establish government bond to certify
guarantee (For government entities with credit issues)
3. Alternative investment in the form of an insurance wrap and or other investment option to protect government guarantee in the event of business failure.
Monetization FinancingStep One Competitive institutional pricing reflective of
credit quality (currently offered @ 8-9%) Option to add escalator for extended loans (libor
+) All lender costs included in fixed price quote Private placement with off balance sheet
structures available Creative repayment options
Repayment terms syncopated with a project’s economics
Single payment 3-5 year repayment available
Monetization Financing No requirement to issue equity or deal with
Venture Capital firms 100% term debt financing available Terms can permit collateral to be used for
Tax-Exempt IRB or bank loans on Equipment and Real Estate + 100 % of costs and payment reserves
No credit committee review and no road show No financial maintenance covenants No post funding reporting requirements
Monetization Financing
Path to funding Conference call to discuss details of project with
principals involved Completion of project data sheet and subsequent
due diligence Proof of support Face to face between lender and IGIG Closing date scheduled
Irrevocable Guarantee Corporate Investment Grade Guarantor
Must be Moody’s or S&P rated BBB 1 or better
Regardless of rating must be acceptable to investor Must cover principal and interest for full term of loan
Irrevocable Letter of Credit Issued or confirmed by an American “Money Center” Bank (Chase,
Wells Fargo, Bank of America, etc.) acceptable to investor Letter of credit based on assets controlled by the bank or guarantee
of investor Generated on behalf of a patron with sufficient assets in his account
to cover the full amount of the loan payment (principal and interest)
Irrevocable Guarantee Guaranteed Contract for Goods, Resources or
Services A signed, “Take or Pay” contract must be in place with an
Investment Grade source, Irrevocably Guaranteeing the minimum “Pay” portion.
The minimum “Pay” portion of the contract obligates the receiver of the goods, resources or services to irrevocably pay the full contracted amount, regardless of whether or not they receive the contracted goods, resources or services
Payments are usually made directly to a lockbox Surety Bond from a Bond Rated Entity
(Guaranteed by an insurance company) Must be issued by an United States registered Insurance
Company, Moody’s AA rated. Guarantees repayment of the full principal and interest at
the maturity date of the loan Insurance company takes security interest in assets of
borrower
Loan Request Facts Total Project cost (in US Dollars) $_____________ Total (US Dollars to be financed $_____________ A preliminary Use of Funds spreadsheet with a loan disbursement
schedule, listing the suggested amount (s) and date (s) for the loan proceeds to be funded
Legal name of IGIG (Investment Grade Irrevocable Guarantor) & relationship to project (customer, sponsor, insurance, bonding company, etc.)
Length (years) of IGIG guarantee Legal name of Project, and the name, title and mailing address to whom
we should address the term sheet. Brief bios of Principal owners/operators; why do they think they will be
successful? Will they qualify for a Performance Bond by an insurance company?
Two or three page Executive Summary describing the project. Why will it be successful?
Your preferred repayment schedule, at 10% interest, amortized within the time of the IGIG guarantee. We can accept up to three years of skipped payments for construction and start-up projects.
Please provide the name, title Fed Ex address, phone, email and web page for: The person we should contact with our questions? The person to whom we should address the Term Sheet?
Government GuaranteeStep Two Federal, state, local irrevocable guarantee replacing current
IGIG guarantees to back total investment = principal, wrap and interest on principal and wrap Start-up companies generally unable to provide
irrevocable guarantee Potential for Federal Government program to provide
open ended guarantee (tarp alternative) (JDIC) JOBS DEPOSIT INSURANCE CORPORATION Government tarp funds used to provide insurance for private investment
dollars invested in job creation enterprises! Invest tarp funds in senior life settlements to leverage insurance dollars Insurance only needs to cover business failures
Focus job creation and tax benefits City, County, State, Federal
Economic Development Council Pilot
Wrap Insurance to Protect Government GuaranteeStep Three
Determine total $ (principal and interest minus recoverable $) needed 5-7 years to repay investor in the event of business/venture failure
Purchase Senior Life Settlement or similar alternative investment vehicle to enable repayment of debt only when business fails JDIC Lottery Other
Government lien on Senior Life Settlement until debt retired Government current budget issues require alternative
to putting obligations on taxpayers to repay lender in the event of failure of the financed project
Benefits Capable of funding start-up and expansion
capital needs Provides window 3-5 years interest deferral to
allow operation to get established and create financial engine to repay debt
Reduce interest cost based on strength of government guarantee (libor +) for extended credit periods to protect against inflation and potential for increase in interest rates
With business success makes Senior Life Settlement funds available to participants for profit sharing
Example (1)For demonstration purposes only not a target for first investment
SOBE $283 million casino cruise ship opportunity
Dade County, Florida and/or Federal Government Guarantee
Senior Life Settlement wrap of $205 million Payout in seven/fifteen years with successful
project $2 billion minus cost of insurance plus carry costs
($205 million + 194 = $399m + cost of servicing life settlement policies)
Ladder Senior Life Settlement 5-15 year Life Expectancy to provide early liquidity
Finances (1)
Project
SoBE $283
Senior Life Settlement $205 $100 M purchase of life settlement$105 M interest reserve
Seven year result Repay capital & interest @ 10% on $283m loan@ 8%
$ 551.5m
$485m
Repay Senior Life Settlement capital & interest @ 10% on $100m loan@ 8%$205M leveraged
$ 399m
$351m$2b
SoBe (1)7 years 150 + temporary jobs created 500 + permanent jobs created Taxes paid annually
Payroll $4m annually Property taxes $1m annually Income taxes $50m annually
Job and tax multiplier effect 3x Senior Life Settlement benefit if not needed for insurance
<$ 1.4B Insurance calculation: Recovery $300M from forced sale of
assets, life settlement cover cost of interest on original loan, cost of purchase of life settlement and cost of interest coverage for life settlement.
Senior Life Settlement benefit if needed for insurance: <$900M
Example (2) must have Shoes
$3 million investment $15 million investment
Year New Jobs Stores
1 34 5
2 73 11
3 132 20
4 228 35
5 367 57
6 513 80
7 701 110
Year New Jobs
Stores
1 46 6
2 166 24
3 354 54
4 603 94
5 974 154
6 1467 234
7 2087 334
Example (3) CMC
Country Music Café Nashville Impact
$5.5 million line of credit
$3.6 million purchase Senior Life Settlement
$3.5 million interest for credit line and Senior Life Settlement
100 + jobs Taxes paid annually
City State Federal Payroll
Alternatives Sell equity year 2-7 to retire debt
Pricing more attractive for private placement after business is operational
Sell equity year 2-7 to own Senior Life Settlement
Pay off obligations from free cash flow Private fund to own Senior Life Settlement and
provide loan protection for fee Re-insurance to reduce cost of Senior Life
Settlement
Next Step Wealth Management:
Confirm Senior Life Settlement platform (Completed)
Blue Orbis: Establish Government Guarantee Ralph LaCivita,
Controller, Naples, FL (Completed)
Steve LaCavita, University of Chicago Graduate Business School
White Paper (Meeting scheduled January)
Ed Burke, Sr. Alderman, Chicago (Yet to be scheduled)
Senator Democrat (TBN) Republican Governor
Sununu Berkshire Hathaway
President Obama Blue Orbis: Explore
alternative money sources to current source
Demonstration project Detroit, Chicago or
Nashville
Covered by Confidentiality Agreement Don Skelton, Blue Orbis
Capital Advisors Tim Moody, Fortress
Family Trust David Tingley FFS Lending Steve Braunstein FFS
Lending Corporate Attorney Kevin
Carmichael, Salvatori & Wood
Attorney John Artz, Patents, Dickinson Wright
Rusty Whitley, CPA, Wilshire, Whitley & English
Greg Fortune, Prosperitas Group
Rey Pezeshkan, PK Studios Ralph LaCivita, City of
Naples Governor Sununu, Sununu
Enterprises William Beynon, Capital
Wealth Blaine Ferguson, Capital
Wealth Jigs McHugh, Capital Wealth David Schwalb, Schwalb
Realty Mark Brodson, Schwalb
Realty Harry Cendrowski,
Cendrowski Corporate Advisors
George Raymond, Advisor
Recap Lender program under Monetization finance
formula Government guarantee Senior Life Settlement Wrap or comparable
protection