Entry into a trading program

This is one of the most difficult areas to invest in that exist. There are plenty of people around who know something about this marketplace, but very, very few know how it truly works. Because enough people know something and the fact that there is significant money to be made, this market attracts many bad players. Two features distinguish these pretenders -- they lack financial and investment acumen and they ask for up front fees. From time to time these pretenders attempt to pull off a major fraud with a significant investor. This prompts warnings issued by the Board of Governors of the Federal Reserve System or the Comptroller of the Currency.These pretenders almost always attempt to setup their fund raising efforts in the U.S. The Fed, of course, will not have any part of that since the process is designed to control and utilize expatriate dollars, not domestic dollars.Banks routinely deny the existence of these programs, even the ones operating them. Most bank officers know nothing in any event. The only way into the system is to be able to certify substantial assets to a commitment holder or one of its sub-licensees. Finding either is not trivial task because there are more pretenders around than legitimate commitment holders. There are very few actual commitment holders. If an investor cannot certify at least $10 million and more likely $100 million, the chances of getting anyone's attention who is genuine are indeed remote. This is why, quite frankly speaking, these offices feel no presumption whatever in jointing for the joint venture, in as much as the funds provided would find it virtually impossible to locate a collateral commitment holder which this program provides on the very highest level.

Nonetheless, there is a way you can get into this interacting market. Designed to provide much of the information required for conducting a due diligence Lender/Investors are skeptical of opportunities that offer above-market returns.

If significant capital is required, little information is readily available with which to conduct a due diligence investigation, there is little motivation for committing funds. This is why XXXX offers the most valuable report on high yield Bank Debentures programs. This report is designed to provide a full understanding of bank debentures trading mechanics. Every statement made in it references either a legal precedent, report or letter issued by a government agency, trade publication or known entity in banking and finance. No pie in the sky deals just facts from official and well known entities.

Here is an overview of what you'll discover:



1. How A letter from the Securities and Exchange Commission, (S.E.C) stating that letters of credit are exempt from registration under the Securities Act of 1933.

2. An opinion from the U.S Supreme Court stating that letters of credit, when acquired for cash, are the equivalent of a deposit liability.

3. A legal historical example of a clean standby letter of credit, the text of which is clean of any requirements of documentation of nonperformance or default for the beneficiary to obtain payment.

4. Why the International Chamber of Commerce is encouraging more equitable practices in the area of standby letters of credit.

5. How to determined when a BANK-TO-BANK transmission is authentic and legal.

6. The issuance of standby LOC involves the separation of many of the services associated with lending, such as credit risk evaluation and underwriting, from funding.

7. Banks argue that they are in the risk management business - whether on or off the balance sheet.

8. An important difference between a standby LOC and conventional financing with uninsured depositors is that a standby LOC beneficiary retains the loan in the event of bank failure as opposed to having to stand in line with the FDIC and other creditors to recover the remaining assets of the bank.

9. The greatest motivation for off-balance sheet banking is the opportunity cost of funding assets with reservable deposits without a binding capital constraint.

10. In issuing an off-balance sheet instrument, the bank acts as a third party in a commercial transaction, substituting the bank's credit worthiness for that of its customer to facilitate exchange while sharing some of its risk with the lender/investor.

11. In effect, banks are willing to rent their credit standing or borrow credit analysis to lender/ investors by guaranteeing the payment of principal and interest-which may be of value to a bank customer who is not well known or established. This enables a bank to receive an underwriting fee that can bolster current profits without tying up capital.

12. A bank may not be asked to issue a guarantee unless it is perceived by the market to be strong.

13. How a standby LOC is similar to an uninsured deposit and subordinated note in that it's value varies inversely with the credit risk of the bank.



14. The incentive to the lender/investor? What is the real return on this arrangement is likely to be greater than that of a deposit while still maintaining insurance against loss.

15. The types of entities who acquire Bank Debentures.

16. A discussion of repurchase programs and credit-enhanced loan transactions.


How a Repurchase Program/Reverse Repurchase Program can enable the note holder to reduce credit risk while facilitating a borrower's need for cash by rolling it over into a secondary market. By utilizing a well-drafted trust, escrow or custody agreement and the trust services of a creditworthy bank, a lender/investor can participate in a repurchase program that combines high return, liquidity and minimum credit and transaction risk

Every statement made in this report references either a legal precedent, report or letter issued by a government agency, trade publication or known entity in banking and finance.