“PRIVATE PLACEMENT”

                   A Brief Overview      

 

[A]      “What is a “Private Placement?”

Private Placement Programs or secured asset management investment vehicles, also referred to as a secured asset management program, are in direct cooperation with AAA and AA rated European banks and trade groups. PPP are an investment vehicle commonly used by the very wealthy where the principal investment is fully secured by a Bank Endorsed Guarantee. The principal is managed and invested to give a guaranteed high return to the client on a periodic basis. The returns can range between 50-100% per month. Some of those returns may be required to go toward humanitarian projects. There is no risk of losing the client's principal investment.

 

[B]       “Why do Private Placement Trading Activities exist?”

The correct answer, from a competent authority: 

“This is the legal and lawful means of increasing the monetary supply necessary, to facilitate the requirements for the natural expansion of international commerce and international business, normally conducted in United States Dollars.”

 

 

[C]       Assets that may be accepted into Private Placement”:

     {1} cash funds on bank deposit or bank instruments (CD, BG, MTN, SLC, etc.) -- must be an  

            acceptable bank, or

     {2} other asset, in safekeeping, in-ground, above-ground or fixed, whose value is guaranteed

            by an insurance wrap or bank document may be acceptable, subject to certain conditions.

 

 

“A brief History”           

As the story goes, the private placement idea goes back to the Breton-Woods meeting after World War II. One result of the meeting was development of a plan to bring back the economic life of the war torn countries in Europe, and to prevent repeating the terrible economic problems following World War I, a factor in starting World Was II. The plan worked and over time it evolved into what is now referred to as “Private Placement.”

 

[D]       Investors Asset in Correlation to the Private Placement”

The clients funds principal is fully secured by a Bank Endorsed Guarantee (or, safekeeping receipt), which is issued by the Trading Bank at the time the  funds, are  deposited. With certain programs all that is needed is just a proof of funds that the client actually owns the funds, this can be done through a bank statement, tear sheet or bank letter and the funds stay in the client's original account.  The client always has control of his or her funds and at NO time at all does the client release these funds to anyone. The client is designated as the Beneficiary of the Guarantee, which is issued to secure the principal for the contract period, and all elements of risk have been addressed. It must be stressed that, before an instrument is purchased, a contract is already in place for the resale of the Bank Debenture Instrument. Consequently, the client's funds are never put at risk. The client's account will always contain the client's original funds.  After each transaction period, the profits are distributed according to the trade agreement signed by the client and the trade officer and the process repeats for the duration of the contract.

 

 

[E]       Private Placement Programs and public knowledge”

Private Placement Programs have been available as mentioned above for quite some time, though not widely known for years, however, because of the extremely high minimum requirements to enter them, only a few could qualify. The client must be "invited" to participate in these very limited enrollment programs.

 

 

[F]       “How to enter an asset into Private Placement?”

Just as an asset owner looking to obtain a credit facility from a bank must first submit a complete documentation package, and only after then will the bank perform its proper due diligence before the asset owner even sees a contract. The same applies to enter a “Private Placement” program.

 

 

To enter into Private Placement, certain rules, policies and laws must be abided by all, which is done after receipt of the client’s initial documentation, as is required under the national and international regulation: “Know The Asset Owner and The Asset”

 

AVAILABILITY OF PROJECT FINANCING THROUGH PRIVATE PLACEMENT PROGRAMS

ALSO KNOWN AS HIGH YIELD INVESTMENTS, PROJECT LOANS, BUY SELL TRANSACTIONS, PRIVATE TRADE PROGRAMS. As Stated Earlier Private Placement Programs have been available to raise funds since World War II.  They are not publicly promoted and participation is by invitation only to those who have expressed an interest to use them.  They are an excellent way to raise funds for projects worldwide without going into debt.  Funds received are profits from buy/sell transactions of bank instruments.  These are not loans and funds received do not have to be paid back.  These programs are under the auspices of the International Chamber of Commerce, United Nations, International Monetary Fund, United States Federal Reserve and United States Securities and Exchange Commission.

 

Applicants are required to send a Letter of Intent  and provide evidence of cash funds under their control that are unencumbered, good, clean, cleared United States Dollars of non-criminal origin.  The person committing funds to a Private Placement Program must have signatory authority over the funds.

 

The following is a list of programs currently available from different providers or traders.  Traders are licensed and have complied with rules and regulations that govern the operation of these programs.

 

To obtain the maximum benefits of participation in a high yield trading, private placement program, he should  expect and be willing to move his funds as directed by the program provider (trader)

In most cases with some exceptions, funds do not have to be moved unless the funds are in a bank which is not acceptable to the trader.  If a client’s funds are in a small bank that does not have SWIFT and screen capabilities, that bank probably will not qualify to participate in a private placement program and the client will be asked to open an account and move his funds into that account.
 

In all cases, a client needs to be willing to comply with the rules required  in any given program.  If he is not able and willing to do that, he will not qualify and is just wasting everyone‘s time)

 

Special note .  Some programs are available  only for a week or less.  We always need at least a Letter of Intent, Client Information Sheet, enlarged color passport copy and proof of funds and names of introducers so we can include them in commissions.

 

In others of the small programs, just the opposite happens.  It may take several weeks to fill some programs and the provider may be delayed in contacting the client.  In such case it is necessary to exercise patience.  If you hang in there and not withdraw before there has been a chance to get you into a program, you will be given the opportunity.

Important information to be aware of

In general, clients wishing to use private placement programs, do NOT want to transfer their funds to any bank but wish to keep their funds in their own bank account without giving limited powers to Traders or co-signatory accounts with the Trading platform. 

HSBC in Hong Kong and top 25 Western banks in Europe are ideal places to have funds for trading purposes.  Clients can keep their funds in their  own accounts in such banks with no outside control, no co-signature, no pledging or hypothecation, no transfer, no power of attorney. 

The Trader trades, not with the client’s funds but with a line of credit obtained from his trading bank.  The required condition for obtaining such line of credit is that the client’s funds are “blocked” or “reserved” in the client’s own account to prevent a double use of funds in the client’s account and at the same time in the Trader’s “mirror” account.  From the mirror account there are no rights of recourse to the client’s account.  This is very important to understand. 

In other words, there is NO RISK to the client’s funds under any circumstances.

It is of interest to know that the High Yield Trading Private Placement Programs ultimately finance the US budget deficit and are controlled by the FED. 

Due to excellent organization, in the trading process (buying and selling of certain major bank securities),

the same capital is turned over, during the contract year, normally at least 250 times.  Consequently, if the buying/selling margin is for example 2%, there is already a profit of 500% in a year.  In reality, the profit is substantially higher but also goes into several hands, not the least of which is the Federal Reserve.

Inasmuch as these program are subject to established banking laws it is important to know that a Trader is not permitted to communicate with a potential investor until the full compliance/due diligence process has been successfully completed.  This is possible only if a client submits at least the minimum required entry documents which are Letter of Intent, Corporate Resolution if the client is a company, Client Information Sheet, enlarged color passport copy of signatory and proof of funds or copy of instrument.

 

Keep in mind that 100 million is much easier to place than anything less than 100 million because 100M is the smallest size bank security (MTN or BG) that can be purchased and used in a Buy/Sell transaction.  Buy/Sells are the means to earn the funds to pay the profits which are paid in private placement programs.  A few programs have the authorization to pool funds sometimes from 1M and sometimes from 10M but most trading programs do not engage in that, making the market for small investments a lot smaller than the 100M and up market.

 

The Mechanics Of A MTN Private Trading Program

Considering that top major banks issue Medium Term Notes (known as MTNs and Mid-Term Notes) to raise funds in both U.S. and Euro dollars, we can better understand that they are for the purpose of generating Operating Loans and issuing Letters of Credit to businesses which wish to buy material and products from other business organizations in other countries. To further expand on this in laymen terms, this therefore results in an International Treaty whereby the U.S. Dollar (or the Euro) becomes the common Medium of Exchange for International Trading.

 

CONTACT

ERIC MOBLEY    323-440-4331

SKYPE                 ERIC.MOBLEY

 

By Federal Law, a European bank is not allowed to sell such Medium Term Notes directly to the Public. They must be issued and sold through a Federal Reserve Licensed Trader; just as in the same context a Corporation or a Municipality must sell Bonds through a Dealer or Underwriter.
The Trader, aiding in the distributional sales of newly issued MTNs from the major sized Bank will have a $50B (Billion) contract (or of equivalent amounts) with the Issuing Bank to purchase MTNs for immediate resale. This Trader would instigate the following:
A Non-Revocable Contract (see further explanation in Paragraph A) with an Exit Buyer, such as a Pension Fund, to buy those MTNs from them immediately, and with a contract with a Participating Investor, acting as the Trader's 'Associate' to furnish the Proof Of Funds (POF) required, simply as a formality, to start and continue the Purchase and Resale series of Transactions.
The Trader also makes contractual arrangements with their own bank, through their bank's 'Back Room' Trading Department, to act for them during the Transactions of $100M (Million) or greater. This $100M amount is the minimum set by the U. S. Federal Reserve for this type of Bank issued MTN Distribution.
The 'Associate' thereby arranges for their own bank to issue to themselves a POF using $100M in Cash Funds, which are wholly owned by them, in their account at their own bank. This enacts the ability to obtain cash credit of $100M for the POF. This POF is then sent to the Trader in accordance with the contract between Trader and their 'Associate'.
It is important to note that Medium Term Note Trading is a very specific process. When less than experienced Associates expect absolute perfection and "up-to-the-minute" communication, these immediate reactions inevitably cause more delays, short-comings and frustrations on behalf of not only the Associate but the Trade Platform as well.
Several factors influence the timing of entering a trade; the current availability of Medium Term Notes, which can easily be in short supply, the timing of the trade submission and the specific programs that cancel without notice. On occasion, these unexpected market trends give a false illusion resulting in the sophisticated MTN Trading Platform to appear chaotic. Nothing is further than the truth.
Below is a typical scenario of a Private Mid-Term Buy/Sell Program.
a. The Trader's Bank communicates with the Issuing Bank as well as with the Exit Buyer's Bank, obtaining a detailed agreement with the Issuing Bank Officer and with the Exit Buyer's Bank that they are both prepared to commence the contracted series of Transactions. The Exit Buyer's Bank forwards a POF to the Trader's Bank for the amount of the first purchase of $100M (Note - When a POF has been issued for the Exit Buyer and forwarded to the Trader's Bank, there is a legal Funding Commitment to complete that Transaction, which may NOT be revoked while the transaction is taking place).
b. The Trader's Bank forwards to the Issuing Bank a POF in the name of the Trader and requests that a MTN be issued in the name of the Trader, along with an Invoice at a discounted price, say for example only $97M, payable in 8 Hours.
c. A copy of the Note and an invoice at $97M, is forwarded to the Trader's Bank, which authenticates signatures and MTN terms to verify compliance with the Purchase Contract.
d. The Trader's Bank then forwards the copy of the MTN, along with a Conditional Assignment of the MTN, to the Exit Buyer's Bank, along with an Invoice at the Exit Buyer's Purchase Contract Price, $100M for example purposes, payable in 4 hours.
e. The Exit Buyer's Bank authenticates signatures, verifies compliance with the Purchase Contract, and pays the $100M Invoice price to the Trader's Bank for credit to Trader's account, within the 4 hour limit.
f.The Trader's Bank pays Issuing Bank's Invoice for $97M within the 8 hour limit, along with instructions for the Original MTN to be sent to the Exit buyer's Bank by courier.
g. The Trader's Bank debits the Trader a Bank Fee (1/4 percent for example purposes) for their Services Rendered, and forwards the balance, $100M minus $97M minus 1/4 percent, to the Trader, who pays the Trader's 'Associate' for their Service Rendered.
h. The Procedure used for this example, typically takes place 4 times each day of a 4 business day week, and repeats until the Trader's Purchase Contract is completed. Using this formula, the weekly payments to the 'Associate', would be equal to 22 percent of their POF amount. (3 percent per transaction x 4 per day x 4 days per week = 48 percent - 4 percent as Bank Fee = 44 percent / 2 = 22 percent = $22M per week)
Note: The Operation described above is a very conservative one. There are other MTN Trade Operations, of the same MTN basis but involving a resale of the MTNs by the 'Exit Buyer', which have a higher Rate of Return to the Trader involved, and therefore an even higher payment to the 'Associate' involved.
An experienced Associate can safely state that with the listed procedure and controls for the Transactions, the only reason for a Transaction failing, once commenced, would be for the Exit Buyer's Bank to default on completing a contracted purchase of a Note, which would result in jeopardy to their Bank Charter.
Should any default take place, it would be quite simple for the Trader to make the required Payment, using their own Funds, to complete their purchase of the Instrument, and to immediately sell it to a different contracted Exit Buyer. This action by the Trader eliminates any risk of loss by the Buyers and Exit Buyers and 'Associate'.
NOTE: With minor variances in the connection of an Investor's Funds to a Trader's $100M Operating Fund, an Investor may enter into an Operation with $10M, or more, with similar percentage payments to them for services rendered. By the same token, an Investor may enter into a trading operation with as much over $100M as they have available.