Method and system for securitizing a future obligation to purchase goods or services
Number of patents in Portfolio can not be more than 2000
United States of America Patent
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N/A
Issued Date -
Jul 18, 2002
app pub date -
Jan 16, 2001
filing date -
Jan 16, 2001
priority date (Note) -
Abandoned
status (Latency Note)
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Abstract
A company with underperforming assets sells these assets to a trading house in exchange for value and a promise to make future purchases from the trading house. The value is provided by a financial institution. A portion of the money received by the trading house from the future purchases is given to the financial institution to pay back the value plus interest. To securitize the promise to make future purchases, the financial institution creates a special purpose entity which, in turn, creates a trust. Investors provide money to the special purpose entity which is used to purchase low risk assets that are placed in the trust. The special purpose entity then makes an agreement with the financial institution that if the company with underperforming assets defaults on its promise to purchase, the financial institution can take money from the trust. In exchange, the financial institution agrees to give the special purpose entity, and thus the investors, a large portion of the interest it receives as a result of future purchases made by the company with underperforming assets.
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