HARD ASSET MONETIZATION
OBJECTS OF ART, PRECIOUS STONES/METALS, MINES, REAL ESTATE, ETC:
An investor wanting to monetize a hard asset and/or take the monetized LTV into trade must clearly understand and focus on the fact that a trader’s credit lines are not triggered by an Investor’s asset(s) itself. What actually triggers a trader’s credit line is the blocking messaging coming from the Investor’s bank (typically via SWIFT MT760) which guarantees (with full banking responsibility) the asset blocking towards the monetization and/or trading bank's credit facilities.
It is absolutely typical that an asset owner's bank is unwilling to assume full bank responsibility for the securitization of a hard asset. In these common situations…the financial solution is obtaining an insurance policy of underwriting that securitizes/wraps the value of the assets in order for the bank to be comfortable standing behind the assets with full banking responsibility. This insurance policy/underwriting contract is also known as an “insurance wrap”. The bank can then stand behind the underwriting/wrap towards the monetization and/or trading bank(s).
The bottom line is that you need the professional/financial sophistication of having a credible bank standing behind your KYC/AML compliance package backed with your bank's full banking responsibility and also accepted by the monetizing bank. All parties and paperwork have to be near perfectly professionally packaged, authenticated, and able to withstand international banking and central banking compliance standards and accountability. It's that simple.
Magister Operis is absolutely direct to a highly-competent monetizer that can obtain wraps in 3-5 days. It is important for you to understand that the monetizer does not want to waste time organizing an insurance wrap for typical asset owners and typical intermediaries that historically DO NOT KNOW how to:
- Read/comprehend/focus like a LASER on the black and white list of pre-compliance items outlined below by professionally gathering and complying with each of those TEN pre-compliance items required for both the monetizer's external compliance officer as well as the transaction banks' KYC/AML compliance departments' to provide blessings.
- Bring forth attorney attestation from a competent law firm that is in the league of $100M+ international financial transactions that will be interfacing with the biggest banks and some of the biggest and most expensive accounting and law firms on the planet.
...95% packages coming into Magister Operis' inbox are totally incompetent within those two areas. It's often a huge headache and waste of time because numerous principals and/or intermediaries don't understand and don't want to understand.. which is a waste of time for everyone. Why hasn't the principal's own bank made an offer on the asset if it is so really, really valuable?? Don't forget to put that into your own letterhead to be respected by the biggest banks and some of the biggest and most expensive accounting and law firms on the planet also if you think the LTV should be illogically high and/or your high intermediary fees have any real value in the real market.
HOW TO INTELLIGENTLY ORGANIZE/PROCURE AN INSURANCE WRAP WITHOUT PAYING FOR IT UPFRONT
- Talk to your bank that will be directing the financial/bankable credit from your insurance binder (policy) towards the monetization bank. Explore why and/or why not your bank will recognize your asset's value within the current market.
- Knowledge of this current state of the value relationships/factors within the custodial and/or blocking banks is critical at this stage to move anything to the next level most efficiently/intelligently.
- If your bank is unwilling to stand behind the desired value… confirm with your bank what underwriting verbiage is acceptable in order for the bank to stand behind the asset for a year and a day similar to the issuance of a standby letter of credit. This allows the bank to stand behind the underwriter’s insurance policy verbiage rather than standing behind the asset itself.
- Contact your underwriter and explain the requirements of the bank.
- Comply with the requirements of the bank as well as the requirements of the underwriter.
- Obtain a ready, willing, and able (RWA) letter from the underwriter that confirms the underwriter's readiness to issue an invoice that allows the payment of the premium to be paid within 30 days preferably alhough as little as 10 days may be allowed. This allows the premium to be paid at the monetization closing.
- Take the RWA letter and proposed policy verbiage to your bank for approval and confirmation with the bank officers.
- Ask your bank to write an RWA letter confirming the bank's readiness to stand behind the underwriting with full banking responsibility.
- Bring copies of the RWA letters from your bank and underwriter to Magister Operis to include in the submission package to the monetizer.
HOW TO QUALIFY FOR MONITIZATION AND/OR TRADING PROGRAMS
The quality of a compliance package as well as the quality of the projects presented as the use of funds is the key issue and critical factor leading to any approval for monetization at the highest LTV (or any LTV) as well as being accepted into any trade programs.
It is common to hear in the Internet brokering world that the trading platforms require humanitarian projects. But the real reality is that what they are really looking for is projects that create jobs and cause socio-economic transformation to communities. A major project coming into a communities provides income from the jobs that allows people to buy their own food and housing. So projects can be both very profitable as well as providing real socio-econonic transformation within communities.
We don't care about the common RULES OF THE ROAD documents nonsense polluting the Internet and often at the top of the document stack in so many near worthless KYC packages. Most of these nonsense packages only contain maybe 25% of what conforms with real bank KYC/AML compliance and transaction requirements today. What actually matters is the quality of the documents and the mentality and coachability of the asset owner because the personality/intellect alone may or may not pass compliance which is actually part of the cover letter in Magister Operis' letterhead included with each package submission package.
TEN PRE-COMPLIANCE ITEMS REQUIRED FOR SUCCESS:
- BACKGROUND OF PRINCIPALS
- Bios of the principals.
- CORPORATE PROFILE
- Client Information Sheet (CIS) that outlines the critical info of principals and corporate info.
- Executive Summary/Letter of Intent/Letter of Request
- Background of the company
- Copies of professional/corporate/tax licenses and registrations.
- Corporate resolutions where applicable
- PROOF OF OWNERSHIP
- Copy of Safe Keeping Receipt (SKR)
- Copy of deposit receipt
- Copy of payment receipt
- Proof of any contract to purchase the asset.
- Proof of any taxes paid on the asset.
- History of modifications to the asset.
- In the case of real estate, a copy of the warranty deed/land title and municipal tax valuations and payment records.
- Copy of Safe Keeping Receipt (SKR)
- VALUATION & APPRAISALS
- Copies of any valuation and/or appraisal documentation.
- In the case of assets with extreme values, appraisals from internationally respected appraisers/auditors will be respected most quickly.
- In the case of real estate, copies of municipal tax valuation.
- Copies of any insurance binders that are currently active on the assets.
- Copies of any valuation and/or appraisal documentation.
- HISTORY OF ASSETS
- Origin of the asset.
- History of ownership.
- History of storage/custody.
- Transportation/customs documents/receipts from departing and destination locations.
- HISTORY OF FUNDS
- History of funds used to purchase the asset.
- If the asset is cash, what is the history of how the funds were generated?
- USE OF FUNDS
- What is the use of the funds from monetization/trading?
- Executive summaries, business plans, and/or financial pro forma that outline use of funds.
- Certified accounting for funds already spent.
- What accounting and legal firms will represent each project?
- COMPETENT LEGAL AND REPRESENTATION
- Attorney attestation letter attesting to the authenticity of the collateral, the ownership of the collateral, the history of the funds that acquired the collateral, and the history (provenance) of the collateral.
- Preferably a law firm with 5+ partners and with errors, omissions, and professional liability insurance.
- CURRENT BANKING CONTACT DETAILS
- Full current banking details.
- Authority to Verify (ATV) document that authorizes verification of account(s).
- BACKGROUND OF INTERMEDIARIES
- List of intermediaries in the transaction.
- The role of each intermediary.
- The background of each intermediary.
- The financial expectations of each intermediary.
"The Wolfsberg Group is an association of thirteen global banks which aims to develop frameworks and guidance for the management of financial crime risks, particularly with respect to Know Your Customer, Anti-Money Laundering and Counter Terrorist Financing policies." - https://www.wolfsberg-principles.com/
It is very important for everyone to understand that the KYC/AML compliance that banks today are required to comply with are very strict. It is similar to the intensity of airport and health security in modern times.
It is a mistake to think that the monetizer is being difficult when the real reality is that the monetizer and its legal and accounting teams are all required to comply with the Wolfsberg Group standards as well as other international banking standards, regulations, and accords any real professional is welcome to research and authenticate for themselves. Feel free to professionally outline in your own letterhead anything to the contrary.
CONFIDENTIALITY AND ACCOUNTABILITY
Magister Operis easily understands that certain confidential information may not want to be shared through Magister Operis directly. That is easily understood and easily handled by putting significant focus on the credibility, competency, and accountability of the client's law firm with a currenty active and healthy errors and omission's insurance binder... willing to attest to the authenticity and accuracy of the client's’ identity, registrations, assets, ownership, provenance, banking, and projects. Client's with less than competent legal representation are probably not most likely to acheive sucess within $100M+ international financial transactions that interface with the biggest banks, accounting, and law firms on the planet. Just sayin'...
A competent attorney can mastermind the verbiage of an attestation letter that does not disclose confidential information yet gains the respect of the monetizer and external compliance officer to welcome an introduction so that parties can get to know and trust each other.
|1) Gather Submission Data
|Depends on client and asset
|2) Magister Operis due diligence on data
|3) Magister Operis has a direct dialog with client to make sure the client is alive, competent, and ready
|15 minutes to 1 hour
|4) Intermediaries professionally package themselves for efficient payment
|5) Magister Operis packages the data for submission to monetizer
|1) Magister Operis submits client’s package to monetizer
|2) Monetizer does due diligence on the data and documents and authorizes an introduction
|3) Magister Operis introduces client/attorney to monetizer via email and arranges video conference call between parties
|4) Monetizer and client have a conversation to get on the same page with each other
|15 minutes to 1 hour
|5) The law office of the external compliance officer does due diligence on EVERYBODY
|6) Transaction attorneys are introduced to each other to draft the transaction documents
|7) Monetization lawyer issues draft transaction documents to client and attorney for review
|8) Client signs monetization contract
|9) Client's bank blocks asset as agreed on behalf of monetization bank as agreed
|10) Monetization bank triggers the credit line and transfers monetization funds into
underwriting account coordinates and project funding accounts as agreed
|11) Intermediaries paid as agreed
|*** DURATIONS NOTE: Please understand that the above time durations are simply hypothetical guesses of what might be reasonable. Actual times will vary depending on the quality the documentation and skillsets of the signatory principals as well as time constraints of all parties involved and COVID travel and/or lockdown restrictions.
Due Diligence: CLICK HERE
Fake Documents/People: CLICK HERE
Magister Operis Workflow: CLICK HERE
Broker Notes: CLICK HERE
Disclaimer: CLICK HERE