Financial Innovations
“Guaranteed Financing Without Multicurrency Amortization, the most innovative financial service!”
Guaranteed Financing Without Amortization Multicurrency
Our company, within the countries belonging to the “Euro” area, has designed the financial operation “GUARANTEED FINANCING WITHOUT MULTI-CURRENCY DEPRECIATION” in order to address and resolve the financial problems related to access to credit of the companies operating there that must make a productive investment.
Structured financing represents a competitive advantage for the production system as it enables the following objectives to be achieved:
- Lowest possible interest rate
- Higher disbursed financing obtainable according to the economic-financial possibilities of the company
- Optimization of company cash flow
- Optimisation of financial management
- Reduction of foreign exchange risk in case of currency transaction with a stop loss in securities
- Issuance of collateral and personal collateral smaller than a traditional transaction
- Elimination, finally, of the release of sureties by members so as not to conflict with the rule of art. 98 of D.P.R. n. 917/1986 (thin capitalization)
Patent
The patent for utility model “GUARANTEED FINANCING WITHOUT MULTICURRENCY DEPRECIATION” was registered by LSA Finance & Consulting S.r.l.
This transaction cannot be used for the consolidation of bank liabilities already existing in the company but only for new investment transactions (purchase of real estate, equity, equipment, production facilities, etc.) or for financial rationalisation operations such as cash pooling, group treasury management, etc.
The transaction complies with the Basel 2 criteria as it operates with a mortgage guarantee, reducing the risk for the Institute involved in the transaction.
Features
Financing is Multicurrency and you can have different types of currencies:
currently in Euro, Swiss Francs, Japanese Yen and American Dollars.
Careful analysis has highlighted to date the different securities in Euro with different maturities and purchase price; however, the optimal situation is that of a zero coupon bond with the following characteristics:
- Maturity between five and fifteen years
- Different auction prices depending on deadlines
- Purchase on the secondary market or on the block market (for Italy)
The guarantee can also be identified by mutual funds or united linked insurance policy.
Other securities with longer or shorter duration can also be identified but they are not to be considered optimal for the attainment of the finalities of the operation that can be summed up in the following:
- Reduce financial expenses through a Multicurrency operation generating a very high corporate free cash flow
- Reduce (eliminate) foreign exchange risk through a bullet operation
A fundamental prerequisite is that the company has no liquidity problems, has adequate capitalisation, enjoys a good image and maintains correct and positive relations with the banking system and creditors in general.
The following can be highlighted:
- The company requires bullet financing in currency (usually USD, Jpy or CHF).
- The investment capital will be repaid on maturity by the security (bond) purchased in Euro.
- The enterprise will have to answer only for the payment of the passive interests and will have to guarantee the latter beyond a marginatura for the exchange risk.
The firm and the Bank shall, in calculating the investment capital necessary for carrying out the project, apply the following financial formula:
- Gross financing disbursed by the Bank for the investment of L (eg) 100,00 – security cost per bullet operation of C (eg 57,00) – foreign exchange risk cover of SL (eg 10%) = VN Net financing; therefore L-C-SL=VN; in the example 100,00 – 57,00 – 10,00 = 33,00.
The company, directly or through its collaborators registered in the Register of Accredited Mediators, must negotiate with the Bank the best applicable interest rate (libor three months) and agree on the frequency of instalments that must be quarterly. Equal quarterly forecast will have the roll-over for currency exchange.
Please note that the transaction is only suitable for companies with a high rating of 4 or higher.