Goldman Sachs &co. LLC

The Bondfactor Company LLC

Other

George H Butcher, Iii

Stephen T Mark

The present invention relates to various methods, software programs, and systems for managing one or more liabilities. More particularly, certain embodiments of the present invention relate to methods, software programs, and systems for managing debt in the form of at least one credit issued by a borrower.

Methods, software programs, and systems for managing one or more liabilities

The invention relates to a computer-implemented method, system and non-transitory medium for managing debt instrument. Insuring for a default of a debt is managed by establishing an insuring debt related to an insured debt of a debtor based on an insured debt amount of the insured debt. The debts can be bonds issued by a municipality. A first loss class and a second loss class can be allocated in an insuring trust. A first class holder can be entitled to a payment from the insuring debt based on a debt owed to the first class holder from an established insuring fund of the insuring trust. The insuring fund is used to insure for a default of the insured debt. If the insured debt is not in default, the payment is diverted to the first class holder. Otherwise, the payment is intercepted, and an insuring payment from the insuring fund is paid to a holder of the insured debt to cure the default.

Method, software program, and system for structuring risk in a financial transaction

A computer-implemented method, system, apparatus, and media is directed to minimizing a risk associated with an anticipated value of an investment. An insurer establishes a capital structure within a computer memory of a computer system, the capital structure designed to minimize risk and structured with regulatory capital and a cash stream that is pledged to fund a default associated with the investment. Establishing the capital structure can include allocating regulatory capital based on a coverage factor multiplied by an average annual depression scenario default percentage for the investment and determining a portion of the capital structure for a pledged insuring investment that produces at least a portion of the cash stream. A determination of whether the established capital structure is sufficient to obtain a minimal target credit rating for the insurer is generated. The desired target rating is electronically provided based on the determination.

A computer-implemented method, system, apparatus, and non-transitory media is directed to providing a graphical user interface for insuring a default of debts specified in financial instruments. A computer system establishes a capital structure which includes an insuring debt related to an insured debt of a debtor based on an insured debt amount representing at least a proportion of the insured debt. A first loss class and a second loss class is allocated for an insuring trust. The capital structure is simulated, including a payment payable from the insuring debt to a first class holder in the first class, wherein the first class holder is entitled to the payment based on a debt to the first class holder of an insuring fund of the insuring trust. An user interface provides a simulation of the capital structure including an insuring scenario based on various alterable inputs.

In one embodiment, a method for managing variable rate debt in the form of at least one credit issued by a borrower, comprising: budgeting for interest owed on the variable rate debt by the borrower during a time period when an interest rate on the variable rate debt is below a first predetermined low interest rate level; applying at least a portion of any existing current budgetary excess by the borrower to reduce future interest rate risk by performing at least one of i) the early retirement of principal associated with the variable rate debt and ii) the funding of a sinking fund; and applying at least a portion of any accumulated budgetary excess by the borrower during a time period when the interest rate is above a first predetermined high interest rate level to reduce an amount of debt service. A corresponding software program and system are also disclosed.

Method, software program, and system for managing debt

A computer-implemented method and system along with a processor readable medium for structuring a financial transaction. The invention includes the steps of associating, by a computer system, a first senior holder and a first subordinate holder with a first credit having a first obligation to make at least one payment, including holding in a first sub-pool a first subordinate obligation of the first obligation to pay the first subordinate holder from the first credit; associating, by the computer system, a second senior holder and a second subordinate holder with a second credit having a second obligation to make at least one payment, including holding in a second sub-pool a second subordinate obligation of the second obligation to pay the second subordinate holder from the second credit; and structuring in at least one computer memory, payments from the second subordinate holder financial instrument to perform the obligation of the first credit for the benefit of the first senior holder to the extent that the first credit enters a default state and payments due the first senior holder from all obligations in the first sub-pool to make the payments are not available.

In one embodiment a method of structuring a credit having a repayment obligation is provided, including: setting an expected maturity date and a final maturity date for the credit; requiring that the repayment obligation be met by the expected maturity date unless at least one predefined event occurs; and requiring that the repayment obligation be met by the final maturity date to the extent that the repayment obligation is not met by the expected maturity date. In another embodiment a method of structuring a bond issued by a bond issuer, wherein the bond has associated therewith a repayment obligation, is provided, including: setting an expected payment date and a legal maturity date for the bond; requiring that the bond issuer establish revenue rates sufficient to pay the repayment obligation by the expected payment date; and deferring the payment of the repayment obligation as late as the legal maturity date to the extent that the repayment obligation is not met by the expected payment date.

Method of structuring a credit having a repayment obligation

One embodiment of the present invention relates to a method for structuring a debt service reserve fund, comprising: investing at least part of the debt service reserve fund in a tax-exempt investment; and obtaining a liquidity commitment on at least part of the tax-exempt investment. Another embodiment of the present invention relates to a method for providing a liquidity commitment on a debt service reserve fund, comprising: obligating a debt issuer associated with the debt service reserve fund to invest at least part of the debt service reserve fund in a tax-exempt investment; and furnishing a liquidity commitment to the debt issuer on at least part of the tax-exempt investment.

Method for obtaining and/or providing a liquidity commitment

A method of structuring a financial transaction, including allocating to a transaction pool n credits, each of the credits having an obligation to make specified payments and each of the credits being in a non-default state when a respective obligation is met and being in a default state when a respective obligation is not met; associating a senior holder and a subordinate holder with each of the credits using a) a respective senior holder financial instrument through which payments from a respective credit flow to the senior holder and b) a respective subordinate holder financial instrument through which payments from a respective credit flow to the subordinate holder; structuring each senior holder financial instrument and each subordinate holder financial instrument to give priority to payments due each respective senior holder prior to payments due each respective subordinate holder in the event a respective credit enters the default state; using payments from at least one subordinate holder financial instrument associated with a credit in the non-default state to perform the obligation of a credit in the default state to the extent that payments due the senior holder associated with the credit in the default state are not available; and providing each subordinate holder at least a portion of the benefit of the obligation of the credit in the default state to the extent that payments due each subordinate holder were used to perform the obligation of the credit in the default state; wherein n is an integer in the range of 1 to 1000. A corresponding software program and system are also disclosed.

In one embodiment the present invention relates to a method for investing yield restricted monies including bond proceeds associated with at least one bond having a bond yield, wherein the bond proceeds achieve a return above the bond yield to which the bond proceeds would otherwise be restricted by regulation, comprising: obtaining the bond proceeds; and investing at least part of the bond proceeds in a tax-exempt inverse-floater financial instrument, wherein the inverse-floater financial instrument has a first rate of return which varies substantially inversely with regard to a second rate of return of a floater financial instrument. In another embodiment the present invention relates to a method for investing yield restricted monies including bond proceeds associated with a portfolio containing at least two bonds, wherein each of the bonds has a respective bond term and a respective bond yield, wherein the portfolio has a term overlapping at least the terms of each of the bonds, wherein an aggregate bond yield is formed of a combination of the yields of each of the bonds, and wherein the bond proceeds achieve an aggregate return, over the term of the portfolio, above the aggregate bond yield to which the bond proceeds would otherwise be restricted by regulation, comprising: obtaining the bond proceeds; and investing, for at least part of the term of a first one of the bonds contained in the portfolio, at least part of the bond proceeds in a tax-exempt inverse-floater financial instrument, wherein the inverse-floater financial instrument has a first rate of return which varies substantially inversely with regard to a second rate of return of a floater financial instrument.

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New Rochelle, NY, United States of America

George H Butcher, Iii