With new ideas extending the scope of risk management and bringing the insurance and capital markets even closer together, Capital Solutions specializes in adapting the concept of insurance to non-traditional risk applications including:
- structured finance advisory services,
- environmental insurance for lenders and borrowers,
- credit enhancement,
- asset residual value insurance,
- specialty performance guarantees, and
- enterprise/finite risk programs
for a wide variety of institutional and corporate clients including investment dealers, finance and leasing companies and transfer agents. In addition, we assist with captive insurance solutions, facilitate the replacement of lost share certificates through Estates and Instruments Replacement insurance and provide traditional surety services.
Captive Insurance Solutions
Sophisticated risk managers increasingly consider self-insurance strategies as a means to reduce their total cost of risk. Many insured's can achieve significant benefits by placing a portion of their risk in an offshore captive insurance subsidiary or by renting a segregated cell in an established captive. Some of these benefits may include reduction or stabilization in the cost of insurance, heightened risk management awareness and lower claims, credit for good claims experience and increased cash flow and investment income. We can help you determine whether a captive strategy makes sense for you.
Structured Finance Advisory Services
Capital Solutions personnel include investment bankers, capital markets experts from the legal profession, leasing consultants as well as CA and CFA designates. Together we have exceptional structured finance experience. We would be pleased to explore the potential enhancements to your structured finance program that might be obtained using cutting edge insurance products.
Environmental Insurance for Lenders and Borrowers
Secured Creditor Environmental Insurance is designed to
protect commercial lenders from potential losses resulting from the
discovery of environmental contamination on collateral property during
the life of the collateralized loan.
Owners and Developers Environmental Insurance protects the bottom-line
of owners and developers of commercial real estate in the event of an
environmental exposure. Having the insurance in place can ease financing
and speed up transactions related to the property.
Credit Enhancement/Financial Guarantee Insurance
Capital Solutions is a leading source of third-party credit enhancement for the Canadian asset-backed securities ("ABS") market.
Payment of interest and principal on ABS is derived from the income flow from portfolios of "securitized" assets. ABS are purchased by institutional investors with stringent credit criteria. We help to meet these criteria by structuring insurance policies that protect investors against defaults in the underlying portfolio of securitized assets. This is commonly referred to as credit enhancement.
For borrowers, the ABS market provides access to the capital markets plus significant accounting and tax benefits. Assets suitable for securitization include leases and loans related to real and personal property, trade receivables, credit card receivables and personal, commercial or corporate loans.
Asset Residual Value Insurance
Residual Value Insurance indemnifies an insured against an unforeseen decline in the market value of an asset, below a predetermined level and usually on a specific future date. Residual Value Insurance can be used to remove asset value risk from leases or loans thus allowing borrowers to obtain more favourable terms.
Users include financial institutions such as banks, trust companies and insurance companies, as well as leasing and finance companies. Residual value insurance can be purchased for a wide variety of assets as long as liquid secondary markets exist. Some frequently insured asset classes include automobiles and trucks, containers, trailers, rail equipment, real estate and aircraft.
Performance Guarantees/Specialty Surety
Performance guarantees insure the fulfillment of contractual obligations. If a party to a contract fails to meet specified performance obligations, the insurer will arrange for another party to step in or provide financial compensation to the insured party.
Traditional applications for surety include building and construction projects. However, performance guarantees can be used to protect lenders and investors against a wide variety of exposures including commodity extraction and environmental cleanup.
Enterprise/Finite Risk Programs
Capital Solutions is continually developing tax efficient products that help to insulate a company's earnings from events that are extraneous to the company's core business.
These are off-balance-sheet hedging mechanisms designed to cover a broad range of very specific risks to which a corporation's earnings may be exposed, such as commodity price fluctuations, and legal and tax liabilities.
