Off-loading Stranded Assets

Strengthen corporate balance sheets by favourably off-loading stranded assets 

"The occasion is piled high with difficulty..."

Example

Russia's invasion of Ukraine led to sanctions, stranding assets of Western interests.

Solution

The application enables the true sale (full risk transfer) of stranded assets held by such businesses, while honoring the letter and spirit of the sanctions:

• A corporation purchases a Stronghold-designed bond.

• A balance sheet neutral transaction. 

• The corporation receives a senior fully secured debt instrument of an insurance company equal in value to the purchase price. 

Following the purchase, the issuer establishes:

• Collateralized (investment) Insurance Reserves to meet all contractual obligations of the bond and

• Purchases the stranded assets from the company.

Programs can size the bond such that the issuing segregated portfolio can purchase the stranded assets at a valuation determined by the corporation.  The solution can purchase the instruments at their value prior to the setting of sanctions.

Fees - Stronghold will size the bond offering to cover costs associated with the program warehousing the stranded assets.  As required by regulatory oversight all programs must fully and transparently disclose all costs and operations of the programs.

Liquidity - Corporations purchasing the bond can sell the instrument or  borrow against the instrument.

Commutation - If sanctions lift and matters stabilize, the corporation holding the bond can call for a commutation, negotiate a breakup fee, and take back the formerly stranded assets.