Instrument Comparisons
Stronghold-designed instruments vs other private & public issues ...
Hard Bullet | Soft Bullet | ||||
Covered | Covered | ||||
Attributes | Stronghold | Sovereigns | Bonds | Bonds | Corporates |
Principal repayment | Guaranteed | Guaranteed | Dual cover | Dual cover | Promised |
Credit quality | Highest Invest. Grade | Varies | Invest. grade | Invest. grade | Varies |
Enhanced yield | Expected | N/A | N/A | N/A | N/A |
Annual payments | Guaranteed | Guaranteed | Promised | Promised | Promised |
Prepayment | Yes | No | No | No | No |
Rate type | Floating | Fixed (typical) | Fixed | Fixed | Fixed (typical) |
Basis | 1-yr UST | SOFR/UST | N/A | N/A | SOFR |
Tier 1 Capital | Yes | Yes | No | No | No |
Hold-to-Maturity | Yes | Yes | No | No | No |
Accounting | Stable value | Stable value | MTM | MTM | MTM |
Concentration risk | No | No | Yes | Yes | Yes |
Ring fenced security | Yes | N/A | Yes | Yes | No |
Bankruptcy | Proof* | N/A | Remote | Remote | Full |
Derivative | No | No | Yes | Yes | No |
Liquidity: | |||||
Dealer market | Yes | Yes | Yes | Yes | Yes |
Secondary mkt | Private | Public | Private | Private | Private/public |
Hypothecation | Yes | Yes | Varies | Varies | Yes |
Collateral value | PAR | PAR | MTM | MTM | MTM |
Commutation | Yes | No | No | No | No |
*Bankruptcy proof to legal certainty