Our intention is to help Users better understand the meaning and significance of various financial terms, processes and transactions that appear with all-too-frequent regularity on the Forum Board.

Release 72: Understanding Private Placement Programs - Working With Bank Credit Lines

Bomb Squad investigators will tell you that bombs of the "light-it-and-run-like-hell" variety are rare. Most bomb-makers use low explosive substances like gunpowder that burn quickly, but won't explode unless confined in a pipe or a box. High explosives, like plastics or TNT, detonate in their natural state and don't need to be packed inside anything; these explosives, however, are expensive and difficult to obtain.

Meanwhile, bomb technicians whose job it is to de-arm these explosive devices will tell you that they never think of bombs as dangerous. To them, a bomb is just a puzzle waiting for a solution - a puzzle that is solvable through careful investigation and analysis.

Our business, too, you could say, requires the careful application of problem-solving techniques (and plenty of detective work!) to help determine the viability of proposed transactions. And it's no easy task: We all know, only too well, that documents can lie, and clients don't always tell the truth. And get it wrong and - well, the transaction can blow up!

Take, for example, working with bank credit lines. Clients who are illiquid - asset rich, but cash poor - can oftentimes participate in a private placement opportunity by utilizing a bank credit line, provided the credit facilities meets certain minimum requirements. You need, though, to proceed with caution - solve the puzzle, as it were - because not all credit lines will pass scrutiny.

Here's a convenient "shorthand" for determining whether or not the credit facilities is acceptable. It's not foolproof - but damn near! Just ask the account holder the following seven questions - it's that simple. If the client is unable to answer "Yes" to all the questions, you probably best give the transaction (and the client) a wide berth.

* Is the credit line bank a major bank?

* Is the credit line activated and in full force?

* Can you drawn down the credit line immediately?

* Is the credit line free of restrictions on use and immediately available for investment purposes?

* Are you the legal and beneficial owner of the assets/collateral used to secure the credit line?

* Were the assets/collateral used to secure the credit line purchased by you using your own cash funds?

* Did you earn these cash funds from your own legitimate business activities?

Robert
lawscape@gmail.com

I work with a senior, high-ranking and credentialed Trader in Europe who is one of the largest commitment holders in the world. The Trader was formerly in government service where he held a highly sensitive position in a prominent U.S. federal agency for a number of years. Our trading group has outstanding capabilities, with its own transacting facilities in most of the major banks.

We have also pioneered an innovative, "client-friendly" Managed "Buy-Sell" Program for clients who wish to participate in a structured, fully managed, "buy-sell" platform. The process is simple and straightforward: Clients needn't transfer their funds. The client's funds are never touched (funds verification only). No joint ventures. No asset management contracts. No powers of attorney. No joint-signature accounts. No 50-50 profit sharing agreements. No SWIFT MT 760's or MT 103's. No surprises.

We also offer business colleagues and friends a monthly "newsletter" setting out information and updates concerning our private placement opportunities. If you wish to receive our newsletter, just send us your email address and tell us a little about yourself - and we would be pleased to add you to our "mailing list".

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