How to unleash a network effect by securitizing a loan
In this case study, a hotel group that was looking to finance a new hotel project consulted with a family office to evaluate its options. But none of the alternatives seemed attractive:
Working with GenTwo, however, the company discovered a truly compelling solution: a custom-designed, tradable certificate using its private loan as the underlying asset. Not only did this new approach offer a flexible solution, but it also proved to be the most cost-effective choice, even for this relatively low amount.
In addition to setting up the issuance vehicle and certificate, GenTwo's services included producing the term sheet that defined the payment terms of the note, as well as the duration, the exact coupon frequency, and interest payments.
The company was thus able to finance its project very efficiently, without any complications. What’s more, the family office was able to offer its clients a new investment vehicle, one that allowed these investorsto participate in a propertybacked project with an advantageous return.
“It was a win-win-win: The hotel group got its financing, the family office got the chance to make full use of its network, and the investors got an attractive investment.”Securitizing a low-volume loan backed by collateral and enabling this certificate to be sold to multiple investors, is a new and exciting service that GenTwo is offering. In particular, family offices, independent asset managers, and private banks can make full use of the potential of their networks, offering their clients a truly innovative investment solution.
– Toni Barros, Key Account Manager, GenTwo
Since we could not rely on any reference cases, we had to develop everything from scratch. Here it was the legal setting that took most time.