Private Placement Program Information
The History
Current private financial programs had their genesis following the end of World War II and were designed to assist in rebuilding the economies of Europe that were decimated by the war. Initially designed to only allow governments to participate, these programs have changed over time to be primarily available to companies and individuals. Today these programs conform to guidelines established by the International Chamber of Commerce for the banking industry. Program structures usually contain four primary components:
The Commodity
The most commonly used commodity is the 10-year term medium term note, or MTN. MTNs are issued by very large banks and sold at a discount, bought and resold by other banks, hedge funds, and other large financial entities, and ultimately purchased by an exit buyer, an entity such as life insurance company or a pension plan who want to hold it for the term of the MTN in order to collect the 7-8% coupon yield. Freshly issued/cut MTNs are usually bought and sold several times before they end up in the hands of the exit buyer, the final buyer.
The Trader
The trader is required because the structure of these programs require that the large banks cannot buy and sell these instruments from each other directly. These transactions have to be handled by a third-party trader. That trader uses a line of credit that is extended to him by a bank to support his activities. The credit line is based on the asset provided by the client. Each transaction is a managed buy and sell in that the trader is required to have a commitment from a buyer before making a commitment to purchase the MTN from the seller. In many cases, this arrangement is subject to bank approval before each transaction can be consummated. Once it is initiated, the transaction is over very quickly as transfer of the MTNs and funds are accomplished electronically.
The Client
Since the trader is not permitted to simply trade his own funds, it should be noted that the trader must always be acting on behalf of a client for which he is conducting the trade. The role of the client is to provide an asset that can be used to support the program. You will learn more about asset types and how they are used on the Private Programs page.
The Profit
The Trader typically receives a trading line of credit equal to or a multiple of the value of the Client’s participation amount. The trade platform can, and typically does, trade that credit line amount multiple times a day. It is this leverage and the high number of completed trades that enable the trader to return extremely high weekly and monthly returns to the Client.
The Project
All trading programs are essentially project funding programs. The project can be either a commercial or philanthropic project provided by the client, or one provided by the trader or trade platform. Depending on the program, there may be a requirement for the client to provide and devote a percentage of profits to his own program.
Final Thoughts
Hopefully, the information above has provided you with the history of these programs, their general structure, and some basics about the manner in which they operate. We invite you to go to the Private Programs and FAQs pages on this site to learn more about specific types of programs and how to engage with them. As always, you can use our Request for Information link to ask questions or request more specific information.
Current private financial programs had their genesis following the end of World War II and were designed to assist in rebuilding the economies of Europe that were decimated by the war. Initially designed to only allow governments to participate, these programs have changed over time to be primarily available to companies and individuals. Today these programs conform to guidelines established by the International Chamber of Commerce for the banking industry. Program structures usually contain four primary components:
- a commodity to be bought and sold to generate yield for the program
- a trader who uses a line of credit based on an asset that is provided
- a client who provides an asset
- a project that will provide humanitarian or economic benefit to the world
The Commodity
The most commonly used commodity is the 10-year term medium term note, or MTN. MTNs are issued by very large banks and sold at a discount, bought and resold by other banks, hedge funds, and other large financial entities, and ultimately purchased by an exit buyer, an entity such as life insurance company or a pension plan who want to hold it for the term of the MTN in order to collect the 7-8% coupon yield. Freshly issued/cut MTNs are usually bought and sold several times before they end up in the hands of the exit buyer, the final buyer.
The Trader
The trader is required because the structure of these programs require that the large banks cannot buy and sell these instruments from each other directly. These transactions have to be handled by a third-party trader. That trader uses a line of credit that is extended to him by a bank to support his activities. The credit line is based on the asset provided by the client. Each transaction is a managed buy and sell in that the trader is required to have a commitment from a buyer before making a commitment to purchase the MTN from the seller. In many cases, this arrangement is subject to bank approval before each transaction can be consummated. Once it is initiated, the transaction is over very quickly as transfer of the MTNs and funds are accomplished electronically.
The Client
Since the trader is not permitted to simply trade his own funds, it should be noted that the trader must always be acting on behalf of a client for which he is conducting the trade. The role of the client is to provide an asset that can be used to support the program. You will learn more about asset types and how they are used on the Private Programs page.
The Profit
The Trader typically receives a trading line of credit equal to or a multiple of the value of the Client’s participation amount. The trade platform can, and typically does, trade that credit line amount multiple times a day. It is this leverage and the high number of completed trades that enable the trader to return extremely high weekly and monthly returns to the Client.
The Project
All trading programs are essentially project funding programs. The project can be either a commercial or philanthropic project provided by the client, or one provided by the trader or trade platform. Depending on the program, there may be a requirement for the client to provide and devote a percentage of profits to his own program.
Final Thoughts
Hopefully, the information above has provided you with the history of these programs, their general structure, and some basics about the manner in which they operate. We invite you to go to the Private Programs and FAQs pages on this site to learn more about specific types of programs and how to engage with them. As always, you can use our Request for Information link to ask questions or request more specific information.
Small private placement program participants continue looking for new secured asset management program information. Enjoy a small cap private placement platform report and other information on what is private asset management program project funding by locating it on SmallCapitalTrade.com. Fundamentals to help you find a private placement program trader or consider a fully managed secured asset management program capital enhancement opportunity are disclosed on this website.
Inform yourself on low-entry private placement funding programs and high yield buy/sell program transactions. Then decide if you want to participate in a private placement platform group or investigate a transparent buy/sell trade program group. Locating a proven private placement program manager that provides secured buy/sell trade platform principal should be one of your top concerns.
Inform yourself on low-entry private placement funding programs and high yield buy/sell program transactions. Then decide if you want to participate in a private placement platform group or investigate a transparent buy/sell trade program group. Locating a proven private placement program manager that provides secured buy/sell trade platform principal should be one of your top concerns.
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Registered Business Address: 25 First Avenue SW, Suite A, Watertown, SD 57201
Mailing Address: 3210 Chestnut Glen Ln, Colorado Springs, CO 80918
Privacy Notice
