Two significant requirements are needed for a client to utilize Monetization Financing:
- An absolute and unconditional promise to pay from an investment-grade rated Obligor;
- Date-certain and sum-certain payment obligations.
An investment-grade Obligor is typically rated by S&P and/or Moodys with an acceptable rating. If a company is not rated, there are alternate procedures to qualify the Obligor. An Obligor is an entity which has contractually agreed to make absolute and unconditional payments to the client for a term of between 1 – 20 years.
This financing vehicle is differentiated from traditional financing in the following categories:
- Competitive Fixed interest Rates
- Non-recourse to the Client
Since we rely on the unconditional promise to pay from an investment-grade rated Obligor, funding is 100% non-recourse to our Clients.
- No Fees or Equity Grants
Generally there are no points, closing fees or transaction fees. Further, there is no requirement to grant equity (stock, options, warrants, etc).
- Flexible Repayment Terms
Unique flexibility in payment terms allowing the Obligor and Client to customize repayment to suit the specific cash flow and corporate needs of the project, including the option to defer initial repayment for up to ten years, and periodic scheduled payments extending from 1 year to 20 years.
- Quick Approval & Closing Process
1.Completion of Qualification Sheet and subsequent due diligence
2.Conference call/face to face meeting to discuss details of project, parties involved
3.Yes or no to funding request
4.Legal document review and negotiation
5.Closing date scheduled
- 100 percent LTV
Monetization Financing provides 100% financing of the discounted present value of the future payment stream.
- No Maximum Amount
Transactions available at levels starting as low as $5 million with no upper limit. Large investment banks typically only undertake these private placements for deals in excess of $100 million.
- Minimal Due Diligence
No need to waste unnecessary time on various layers and committee approvals on the detailed review of client’s financials, projections, business plan, collateral and other documentation. This is due to our overwhelming reliance on the promise to pay of the investment-grade Obligor.
- No Required Use of Funds
Our clients have the ability to utilize the funds for whatever business purpose they choose (operations, acquisitions, dividends, etc) without any restrictive covenants.
- No Reporting Requirements
Our clients are not subjected to any post funding reporting requirements.
- Not Debt to Obligor
Financings are often structured via operating/maintenance agreements to avoid being classified as debt on the balance sheets of the Obligor, which is more beneficial for many budget-restricted entities such as large corporations, hospitals, school districts, government, etc.
- No industry restrictions
We have the ability to fund transactions in virtually any industry.
Our low interest rates are determined by a combination of the term of the loan and the credit of the investment-grade Obligor.
Where Monetization Financing Works Best:
- Service and Supply Agreements
- License Agreements
- Energy Savings Contracts
- Waste-to-Energy Facilities
- Renewable Energy and other Green Initiatives
- Real Estate and Project Funding for Cities and Counties
- Deferred Compensation
- Real Estate and Infrastructure
- Funding for Government Programs and Projects
- Monetization Financing vs Traditional Funding
- Monetization Financing Benefits
- Monetization Financing FAQ’s
Simply stated we offer the best financing package available to investment grade entities – low interest rates, no equity or board seats, no covenants, no oversight and done in a quick and efficient manner.
Industries Where Monetization Financing is Working:
- Waste Management
- Water Purification
- Green Energy (Power Purchase Agreements)
- Waste-to-Energy Facilities
- Wind Turbines and Solar
- Oil and Gas
- Wastewater Treatment Plants
- Food Processing
- Nearly all industries can be approved!