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Joanne Marlowe
VRDN
VRDN
MVRDN CORPORATE OVERVIEW
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VRDN DOCUMENTATION
COMMERCIAL APPLICATIONS

The CVRDN is designed as a source of debt capital for many commercial business areas such as:

Asset Acquisitions    • Infrastructure
Auto Industry Floor Planning    • Manufacturing
Entertainment    • Maritime Industry & Services
Equipment Financing    • Sale-Leasebacks
Hospitality Industry    • Trade Finance
Leveraged Buy-outs    • Transportation

Recently, however, the CVRDN has been repositioned as a critical source of liquidity that can empower a finance structure that may be applied in place of many types of securitized debt instruments.  Specifically, the CVRDN can be deployed to raise the high volume of capital required to enable the acquisition of select qualifying loan or credit assets into an aggregated asset portfolio.   

Highlights

  • The CVRDN is designed to raise high volume credit proceeds that can be applied to the acquisition of substantial asset portfolios.
  • The CVRDN incorporates standard terms and conditions, regardless of whether it is applied to conventional commercial transactions or Asset Aggregations, making it a scalable and efficient capital sourcing tool.
  • The CVRDN benefits from interest rate pricing on the short-end of the yield curve, making it potentially more cost effective for a qualified Transaction Sponsor to acquire and aggregate high quality credits into a single portfolio. 
  • By marrying the CVRDN to United FT's CPC product (Enhancement CPC), a Transaction Sponsor may incrementally access lower volume letters of credit that, when taken together, enable a high volume of CVRDNs to be converted in order to apply the proceeds to the desire loans or assets being acquired. 

Functionality:

Although pictured within the context of the simple acquisition of a real estate parcel, the below schematic is helpful in understanding (1) the sources of credit enhancement that underpin a CVRDN -- the Principal Letter of Credit and the Interest Letter of Credit, and (2) many of the key Vendors that enable a CVRDN to be issued.

CVRDN Highlights of Analysis

For more information about the uses of the CVRDN, please click on "Contact Us".

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