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LEVERAGE ASSETS BOND STRUCTURE PROGRAM

Bluestone has partners with AWI for innovative leveraged asset bond structures progra

Many funders want some form of guarantee for their projects, but there is an alternate approach via the Private Placement Property bond issue where the "assets" of the project (future cashflows, off-take agreements, assets underground (mining), shareholding etc.) are pledged and embedded in the bond. Put differently, you would issue a bond against the project which they would purchase for $x and in the event of default on the debt note (repayments) they would redeem the bonds and take the "assets" of the project.


They would purchase the Bond at a discount 80% of face value and already they have made a 20% return on their investment.


A bond with a ISIN no takes about 2 weeks (14 banking days) to issue and less expensive to issue and lot more simpler than a bank guarantee.


Plus Bonds are tradable and if the asset is a top class Mauritian Hotel or rare Earth Mine then they are very desirable and in demand

See below the benefits and advantages of this innovative project funding approach

Description of Leveraged Asset Funding Structure

Owners of assets leverage their assets into offshore Property Bond with ISIN No thats used for

  • Collateral for Investment bank to provide guarantees to funders 

  • Private Placement via recognised offshore brokers.

  • Initial Public Offering (IPO) on one of the International Bourses


Upside/Downside


The Upside of this transaction is you get Investors funds in your mine with no overhead of management of how you spend the funds, but the downside you have three years (average maturity term) to buy back the bonds or you lose everything as the after 3 years the owner of the bonds own everything.

Roles of Stakeholders

  • Authorised Signatory acting on behalf of Shareholders/Owners - Providing key documents as required and signing agreements on behalf of Shareholders/Owners

  • Bluestone Service Group (BSG) - Initial advisory and filtering of clients/transactions

  • Amalgamated Wealth Investments (AWI) - Transaction Programme Manager

Structure Key points

  1. Seller/Owner/Shareholders must be prepared to leverage their assets, appoint BSG/AWI and enter and any raised funds in AWI’s Prime Capital Market.

  2. Transaction is on Risk & Reward, BSG/AWI will take the RISK and provide funding for the Bond creation BUT BSG/AWI will manage the manage the funds until our initial debt & fees/commission are paid off.

  3. Assets must be worth €300Mn plus, as assets will be discounted via Investment Bank (up to 50%) and minimum required to enter Prime Capital Market is €100Mn plus commissions 3% plus initial project funds.

  4. Seller must have top independent valuation that will be accepted by Investment bank

  5. No liens against the asset as Bond is owned by Asset Owner. 

  6. Property Bond has underlying assets that create a highly trade-able instrument and acceptable package that can be traded or used as collateral. 

  7. Full Disclosure from Seller/Owner/Shareholders. Any legal procedures of any kind against the asset must be disclosed.

  8. The assets will be discounted by the Investment Bank and the discount is very dependent on class of asset and associated risks.

Basic Key Documents required (initial documentation but not final)

  1. Shareholding structure of all assets

  2. Audited bank statements for the last 3 years.

  3. Independent Evaluation Report on all assets showing Nett Present Value (NPV)

  4. Business Plan (reason for raising the funds)

  5. Shareholders Resolution agreeing to leverage the assets (shares) and appointing Authorised Signatory

  6. Formal document (Letter or Shareholders/Board resolution) from Authorised Signatory to appoint BSG and AWI to raise funds via the bond and Prime Capital PPP Market

Bluestone Service Group

Cape Town, South Africa

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