Stronghold has developed solutions to strengthen corporate balance sheets by off-loading stranded assets
"The occasion is piled high with difficulty..."
Russia's invasion of Ukraine led to sanctions, which stranded assets of Western interests.
Solution
Stronghold has developed an application of our investment/credit insurance solution, which can enable the true sale and thereby full risk transfer of stranded assets held by such businesses, while honoring the spirit and letter of the sanctions.
A corporation purchases a Stronghold designed bond.
Stronghold designed the transaction as balance sheet neutral. The the cooperation receives a senior fully secured debt instrument of an insurance company equal in value to the purchase price.
Following the purchase the issuer establishes:
Collateralized (investment) Insurance Reserves to meet all contractual obligations of the bond and
Purchases the stranded assets from the company.
Stronghold can size the bond such that the issuing segregated portfolio can purchase the stranded assets at a valuation determined by the corporation.
The solution can purchase the instruments at their value prior to the setting of sanctions.
Fees - Stronghold will size the bond offering to cover costs associated with the program warehousing the stranded assets. As required by regulatory oversight all programs must fully and transparently disclose all costs and operations of the programs.
Liquidity - Corporations purchasing the bond can (i) sell the instrument or (ii) borrow against the instrument.
Commutation - If sanctions lift and matters stabilize, the corporation holding the bond can call for a commutation, negotiate a breakup fee, and take back the formerly stranded assets.