Our project finance department is divided into two areas:
- Public Private Partnership (PPP – Government/Private Project Financing)
- Asset Transfer Facilities
One of the AIL principals has a direct mandate with Actus Investment UK Limited as their Project Advisor. Actus is a boutique fund management firm that works and sources for project financing in select areas of growth around the East Africa. We are therefore pleased to inform you that, to complement our alliance with the Pan-African Swiss PE fund Quantum Global, for whom we closed a $200M cement plant investment in Mombasa, our Actus team has now partnered with the mighty Top 25 European German World Bank; Deutsche Bank to assist them in their investment push into the East Africa. Our team is interested in PPP projects as they are usually more secure to invest in and there is also government participation in terms of the total financial outlay.
Projects that we would be interested to collaborate in fall generally in the following categories:
Water and sanitation
To enable us qualify a project for financing to be able to present it to Quantum (equity) or Deutschemark Bank (project finance), the project owners would have to satisfy us on the following:
- Who is the operator?
- Is debt needed as part of the investment, and if yes which banks could be interested?
- Are all regulatory permits and licenses in place? If not, what stage are they at?
- Is there a business plan? If not, by whom and by when can it be done?
- Are there any sovereign/government guarantees or support?
- Is the project economically viable, Vis-a- Vis payback period and cash flow stability?
- Is there a feasibility in place? With sensitivity analysis? Are assumptions therein verifiable?
- What is the IRR? Are any of the risks mitigated via insurance, off-take guarantees?
- Who is the sponsor/owner/developer of the project?
Should a project qualify on the above, we would be prepared to take it forward immediately. Additionally, we will take up any projects with sovereign guarantees from the government immediately. We like to come into a project at the very onset. Our team has 95% proven success closure rate.
We would like to help our client to originate, present the model to government through relevant government bodies like PPP Unit in the case of Kenya, and structure the entire transaction for consumption by our financiers. We call on government to talk to us about their PPP projects that they need funded through this model and we will structure the best arrangement. We perform a service for fee through our strong financial intermediation model that is second to none.
Talk to us today for more details
AIL has appetite for project financing within the African region through what is known as Asset Transfer Facilities also known as Asset Transfer Arrangements. Asset Transfer Facilities depict a situation whereby the asset fund provider (owner of the asset, usually U/HNWI, Huge Corporate or institutional investor) commits part of his assets in a top tier international bank for the benefit and use by another party (the fund seeker is usually an individual or corporate) through a private placement program. Hence, private place program is the involvement of several parties in an arbitrage transaction for the sole purpose of raising money for project finance. Essentially, the asset fund provider uses his own credit line in his bank for the benefit of the fund seeker. In turn, the fund seeker uses the asset (usually debt instruments such as a bank instrument – BG/SBLC /MTN) for furtherance of his business by either converting the asset into cash (usually called monetization) or as a security in his own bank to access funds, enhance credit line or underpin a huge commercial transaction through a buy/sell arrangement; whose financing would otherwise be unavailable conventionally. All these arrangements are guided by a contract known as a Commitment Transfer Arrangement or Asset Transfer Agreement.
Before attempting to tackle the topic of what is now generally known as PPP’s, it is vital to appreciate the basic motivation for their existence. This website explains the fundamental concept of what money is and how it is generated; regulating the demand for money and credit, and the technique of issuing a debt note; discounting the note, and selling the note severally to a chain of buyers in arbitrage transactions; and in what manner all these processes lead to the generation of extraordinary earnings, which are often used for key project or (private) corporate financing. In most cases, these funds are extended as free and clear funds, and in some special instances; those funds do not have to be repaid back; and this is called non-recourse funding.
Private placement structured level business opportunities exist to ‘create’ money. Money is created by creating a debt.
For instance, you can loan $100 to a friend with an agreement that the loan’s interest will be 20%, meaning that the total to be repaid would be $120. You have basically created $20 out of nowhere; although you didn’t have the money initially.
Ignore the legal processes of such an undertaking and concentrate on just the numbers only. Banks are doing this kind of lending on a daily basis, then again with considerably more money giving banks the power, principally, to create money from nothing. For the reason that PPPs involve trading with discounted bank issued debt instruments, creation of money happens due to the fact that such asset transfer facilities are debts or deferred payment obligations. Hence, money is generated from the debt.
Hypothetically, any person or company can issue such debt notes (overlook the legal features of the process) since they are deferred payment obligations to the beneficiary, meaning that they will be repaid in the future.
Example: Somebody (an individual or company) needs $200. He writes a debt note for $220 that falls due in one year’s time, but sells the debt for $200 now to another party. This is known as ‘discounting’. Ideally, it is possible to issue many such debt notes of any amount as one desires; provided that the buyers believe that he or she is financially strong enough to honor the debt notes upon their maturity.
Debt notes such as bank instruments are issued at discounted prices in top international banks in their Billions in the same style on a daily basis.
Basically, they ‘create’ such debt notes out of the thin air, simply by generating a document.
Issuing such a debt note is very easy and simple, but the fundamental problem is that the issuer of that debt note would have difficulties getting ready buyers; unless those buyers ‘believe’ that the issuer is financially strong enough to honor the debt note payment once it matures. Any bank is able to issue such a debt note, sell it at a discounted price, and agree to pay back the full amount as indicated once that debt note falls due. The big question would be whether that issuing bank would find any ready buyer of such a debt note; without being strong financially? That’s the main underlying explanation as to why the debt notes are restricted to a few top international banks. These debt notes are issued (usually) by top international banks (mostly Western European banks though other top banks also issue them) and are fully cash-backed with funds that are good, clean, cleared, of non-criminal origin and free from any liens, encumbrances and third party interests.
For example, say one of the strongest European banks traded debt notes with a face value of €2 million at a cut-rate price of €1.8 million, most of us would consider buying one, bearing in mind the financial means and opportunity to verify the notes in advance. Contrariwise, if a stranger approached you on the street with an identical debt note from a bank that is not known, and offered it for the same price; most of us would walk away. Trust and credibility greatly influence the issuance of these bank instruments in the market. This also demonstrates why there are a lot of fraudulent activities involved with bank instruments and so many bogus instruments being promoted by joker-brokers to the unsuspecting public in this marketplace.
Large Debts Instruments’ Market
As a result of ‘money creation’ explained above, there is a huge daily market for discounted bank instruments ( MTN, BG, SBLC, Bonds ) comprising of issuing banks and groups of exit-buyers ( for example pension funds, large financial institutions and other institutional investors) all operating in a world class Private Placement arena.
These activities are done by the bank as ‘Off-Balance Sheet Activities’, therefore, the bank profits in many ways. Off-Balance Sheet Activities are usually referred to as contingent assets and liabilities in IFRS 9, whereby the value is influenced by the outcome of which the claim is founded; comparable to that of an option. Off-Balance Sheet Activities usually appear as memorandum items Only on the balance sheet. The practice in the financial sector (IFRS 9) is that off-balance sheet activities are treated as either a debit or credit provided that they generate a transaction. Consequently, there is no deposit liability on the bank’s part; hence the bank does not have to consider binding capital constraints.
Up until the 2008 financial meltdown, PPP’s were the sole territory of the world’s largest corporations and ‘arm’s length’ government bodies (governments, companies listed on stock exchange and banks themselves are not allowed to place funds directly into a PPP).
The normal minimum deposit was $100,000,000 until that time. Nevertheless, the sector has ‘extended down’ into the ordinary ‘mass-affluent’ market since then and, through the buy/sell programs that have now developed out of the PPP market, it is now possible to enter a program with as little as $50,000 – $100,000 that will deliver double-digit monthly returns. Therefore, the marketplace has now evolved into two mainstream segments:
With a minimum deposits of $100 million. Big institutions, funds and foundations from time to time deposit funds in Billions to provide staple financing for major projects, particularly in the developing countries. The World Bank, IMF and other global monetary authorities do not have any concerns about the inflationary effects of this newly advanced money, as it is always absorbed through labor and materials.
Many a times in these programs, customers will enter into a Joint Venture (JV) with the trading group, and they will pay the agreed profits into a bank the customer instructs them to pay the money, but in a friendly jurisdiction. Alternatively, customers will enter into a generic contract where their profits are simply paid to them from the trading activities generated by the trading group. Under normal circumstance, the conditional precedent is that the money should NEVER be used to fund Terrorism activities, Money Laundering, Crime, and Political Upheavals, gun trade and/or any illegal activities. The U.S has come up with the Patriots Act and many other countries have followed suit to bring laws that curb proceeds of crime, terrorism and anti – money laundering and prevent these monies from being cleaned in the system. There are very stiff sentences for anyone practicing them. This is usually explicitly clear in the contract and that is the prime reason most trading groups will insist on project proposals or a clear explanation of the use of the funds.
These have developed out of the PPP arrangements where brokers can utilize commodities, forex and a number of bank instruments to do trading. They are frequently traded by solitary dealers or autonomous trade desks and can create double-digit week after week returns on deposits from as low as $50,000 – $100,000.
Notably, these structured arrangements are undertaken at the comfort of the trading platform manager (head of a trading group), as well his group’s timetable. They are not generally accessible many a times. Numerous U/HNWI’s, their family workplaces and wealth administrators utilize this ‘low entry’ choice just to “test” the procedure. They finally return into the marketplace with bigger deposits. It is conceivable with some of these program that you will have the capacity to consequently roll over your profits through a compound trade; an exceptionally successful capital enhancement tool. While, numerous other buy/sell programs obliged you to pull back your profits every now and then, everything relies upon the owner of funds, geographical location, jurisdiction and many other considerations.
Kindly go through this section carefully to get an insight of how the extraordinary profits associated with PPP’s are created.
All trading programs in the Private Placement field do trading with some discounted debt notes of some type. Additionally, so as to sidestep the lawful confinements, this trading must be done on a private level. This is the fundamental distinction between PPP trading and ‘normal’ trading, which is greatly regulated. This is a structured Private Placement level business dealing that is free from the normal confinements in the in the securities marketplace. It depends on trusted, long established private business relationships with some guiding principles.
Apart from the widely perceived open market there is a much closed, private market comprising a controlled number of ‘Master Commitment Holders’.
These are trusts, foundations and various entities with huge amounts of cash that enter legally binding agreements with banks to purchase a predetermined number of fresh cut instruments (Instruments that are new in the market and don’t have an ISIN or CUSSIP code and an identifier bar code) at a particular price within a controlled time frame.
Their sole duty is to resell these instruments, so they contract Sub-Commitment Holders additionally called FED Number Holders, Collateral Commitment Holders or License Holders; who also contract exit buyers. Once the fresh cut instrument gets in the hands of the FED Number Holders/Sub Commitment Holders/guarantee commitment holders/permit holders, they are generally given an Identification Number normally called ISIN or CUSSIP Number, and an identifier Bar Code. This is done to enable the instrument be screened via major screening organizations like Bloomberg or Reuters. At that juncture, the instrument stops being ‘fresh cut’ and becomes ‘seasoned’, which implies that it is “live” on the trading platform. These licenses/FED Numbers are allocated by the U.S Federal Reserve on a yearly renewable arrangement, booked under Bank of International Settlement and controlled by U.S Treasury. Thus, that is the sole motivation why the U.S Federal Reserve, Bank of International Settlement and the U.S Treasury are involved in due diligence since that instrument is reserved under any of their affirmed screening platforms and they Must clear and approve any structured private level transaction before one can be allowed to enter into a contract with the trading group. The FBI is contracted by the above do institutions to carry background checks on the applicant/s to ensure they are not involved in terrorism financing, money laundering, that their sources of money are clean of any criminal activity and they are not individuals who are involved in war or political upheavals. That additionally clarifies why due diligence is Mandatory before induction into the program. The exit buyers or institutional buyers purchase an instrument that has proper codes (ISIN/CUSSIP and additionally the standardized identification identifier). This type of pre-arranged and contracted buy/sell is called arbitrage, and can Only happen in a private market (the PPP market) with pre-planned prices. Consequently, once the trading has started and generated its first income with 30-60 days, the traders are no longer required to be in control of the client’s deposit. Regarding the private financial investor marketplace, all players in the Private Placement investment programs Cannot do business for profit incentives only. As a requirement, a considerable amount of the profits generated from the structured trading arrangement must be invested into project finance initiatives. All components of these transactions are undertaken by a closely supervised transaction arrangement monitoring unit which does not specifically include the Federal Reserve who choose to remain as transaction guide. Also, the substandard entry level requirement for private placement starts at $100MM, with every other sum starting at $10MM set under syndication to build up to the $100MM least entry requirement. Pooling of financial resources is where brokers and their intermediaries for the most part concentrate their efforts as there is an enormous that market exists for small funds. These instruments have a dynamic secondary market which is comprised to a great deal by institutional buyers who wish to purchase and hold the instruments until their maturity, while gathering their yearly coupon premiums.
A $100MM store anchored by a humanitarian project funding can gross 40.5% every day and net 30.0% every day to the record in the wake of invoicing and clearing. Assuming that this is permitted to increase every day (no draw down of earnings) the compounding interest over a 10 day contract would yield a net of $6,364,676,332.00 with an arrangement fee expense cost of $2,121,559,777. In all actuality, the Federal Reserve controls the measure of profit permitted to be earned by the financial investor on any one event, subject to a number of considerable characteristics. As far as possible, the scenario above might be permitted on account of a project finance for a government’s hydro-electric dam whose cost is roughly 4.5 billion dollars.
These notes have an approach before they achieve your substantial purchase, for the reasons below: (1) they are issued by admitted banks under a master commitment (a signed agreement) understanding and must be obtained by one entity that is a Master Commitment Holder. (2) They must be purchased in United States currency notes and (3) the trader who controls the most amount of client’s deposits is given first priority.
This may appear to be particularly out of line, however the creators of this structure have introduced these conditions to guarantee the respectability of the instruments and for conformity with a huge number of regulations. Banks and institutional buyers (sovereigns, trusts, pension funds, mutual trusts and insurance groups) are forbidden from buying this kind of a collateral, as they are barred from putting money in unrated securities and/or from procuring securities on a “funds first” contractual basis. For that to happen, it is a normal practice for the collateral to be principally changed into live or seasoned instruments; meaning that it becomes a registered security (with proper ISIN or CUSIP codes), and therefore a screenable security.
Be that as it may, no program can begin unless there is an adequate amount of cash to support every structured arrangement. This is where you, the customer, is required in light of the fact that the contracted banks and commitment holders are not permitted to enter into trade with their own cash unless they have sufficiently put aside enough money, containing cash that is owned by customers, that is never at risk at any given moment.
The trading bank usually loans a trader; based on the client’s deposits the trader controls, by way of advancing a credit line against that deposit. Ordinarily, this cash is lent at a proportion of 10:1, yet amid specific conditions, proportion can be as high as 20:1. This also means that, if the trader can “control” $100 million of a customer’s deposit, then the bank can advance the trader $1 Billion against the deposit the trader controls, with which the trader can use to trade. Truth be told, the bank is advancing a credit line to the trader in view of how much customer deposits he controls since the banks cannot advance leveraged funds without a proper security.
For the reason that bankers and related financial specialists are very much aware of the “normal” open market and of what is referred to as ‘MTN-programs’, they are normally locked out of the private placement market. Hence, they find it difficult to believe that it exists within their particular establishments since it happens at a lever far taken away from their normal banking and financial processes.
Arbitrage and Leverage
Because bankers and financial experts are well aware of the ‘normal’ open market, Private Placement trading safety is based on the fact that the transactions are performed as arbitrage. The bank instrument will be bought and sold immediately with pre-determined price. A number of buyers and sellers are contracted, including exit-buyers comprising mostly institutional buyers and/or extremely wealthy individuals. The arbitrage contracts, provision of leveraged funds from the banks and all settlements follow long-established relationships and rapid processes.
Since investors and financial specialists are very much aware of the “normal” open market and Private Placement, trading safety depends on the way that the trades are executed on an arbitrage basis. This implies that the instruments will be purchased and sold instantly with pre-determined prices. Various buyers and sellers are contracted, including exit-buyers involving institutional buyers like financial institution, organizations, insurance agencies, or ultra-high net-worth individuals (U/HNWI) and their families. The arbitrage contracts, advancement of huge amounts of leveraged funds normally involves many relationships and a myriad of procedures that have been established over a long period of time.
The issued instruments are never sold specifically to the exit buyer, however to a chain of market players. The participating or transacting banks are not permitted to straightforwardly take part in these structured arrangements, yet they benefit from them incidentally by advancing an interest-bearing credit line to the traders. This is their leverage. Moreover, the banks benefit from the commissions charged in every structured arrangement.
Such arrangements never flop since they do not start before arbitrage members have been contracted, and every player knows precisely what part to play and how they will benefit from the structured arrangement. The trader is generally ready to secure a credit line normally 10 to 20 times that of their client (the customer’s deposit). Despite the fact that the trader is in control of that funds, the funds still cannot be spent. The trader requires just to demonstrate that the funds are unencumbered (blocked), and are not being utilized somewhere else during period of trading.
This model can be shown in the next case. Assuming that you are offered the opportunity to purchase a motor vehicle for $20,000 and that you additionally discover another purchaser that will get it from you for $25,000. Assuming that the transactions are undertaken simultaneously, then you will not be required to “spend” the $20,000 and afterward wait to get the $25,000. Undertaking the transactions simultaneously nets you a quick profit of $5,000. Conditionally, you should in any case have that $20,000 and demonstrate clearly that it is still under your control.
Arbitrage structured arrangements with discounted bank instruments are executed in the same fashion. The transacting traders never really spend the cash, however they have be in control of it and clearly demonstrate that to the trading bank in order to secure a credit line. The customer’s deposit is reserved for this purpose, to enable the trader indirectly leverage on the credit line facility extended by the bank.
Perplexity is common in light of the fact that the discernment that the funds must be spent to complete the structured arrangement. Despite the fact that this is the usual method for “normal” trading – purchase low and offer high – furthermore the normal approach to do business on the open market for securities and bank instruments, it is conceivable to set up arbitrage transactions if there is a chain of contracted buyers, but only in a private market.
This is the reason why client’s funds in Private Placement Programs are always safe and without any trading risk.
As an immediate result of the PPP environment where these structured arrangements are conducted, a non-solicitation agreement must be entirely adhered to the industry players. This understanding unequivocally impacts the way the members can interact with each other. Many non-solicitation encourage scam endeavors, because at an early stage, it is utterly difficult for the clients to know honest groups to be in contact with.
There is another motivation why so few experienced individuals discuss these structured arrangements: for all intents and purposes each agreement including the utilization of these high-yield instruments contains exceptionally express non-circumvention and non-disclosure phrases restricting the contracting parties from revealing any details of the structured arrangement for a predetermined number of years. Consequently, it is extremely hard to find experienced parties who are both learned and willing to speak transparently about these kind of instruments and the profit or earnings of those arrangements in which they figure.
Honest PPP’s and Buy/Sell programs are restricted to all but those closest to the market, which includes Ableways International Limited.
If you are considering entering a program please send the following information to email@example.com
- How much deposit you want to place (The minimum is Usd/Euros 100 Million)
- Your country of residence
- Please also attach:
- Proof of funds (POF – We will give more information to the qualifying applicant) in the form of a screen grab of your current statement not older than 3 days. All account identifiers can be redacted. Our traders are only interested in seeing the name of the bank, your name on the statement and the current balance. Our trading groups will not respond to your application unless they see this information. Our minimum entry requirement has several levels which will be explained to qualifying applicants.
- A project for financing or a clear use of funds.
- A copy of your current passport.
One of our principles is an intake/compliance officer with several trading groups hence we cannot present you to any of the groups without the above information.
From this information, we will assess the best current option for you, and forward the information to any of our relevant trading groups. The trading group will usually come back to you directly within 48-hours, after conducting preliminary due diligence, advising if you can be accepted into any of their programs. Once accepted we recommend you follow their intake and transaction process diligently.
NOTE: If you are a wealth manager or other advisor or broker you will need to make your own fee arrangements with your customer.
Once we link you with the appropriate trading group and you get accepted, we will have a separate commission agreement and step aside. All your agents also will be excluded from all other communication and the trading group will only communicate directly with the client.
Talk to us today about you private placement requirements
The above presentation is for information purposes only and should not to be considered a Solicitation of Funds or an attempt to Sell Registered Securities or other commodities.