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