Swapping Real Estate

We will be:

	PROTECTING the assets of the client that is pledged.
	Providing an immediate 10% Fee to the client on all Financings aided by the client.
	Providing a 2.5% Fee to the client on all Financings aided by the client asset pledges each calender quarter the pledge remains outstanding.
	Obtain whatever equity kickers or residual benefits to the client that we can accumulate for him on the deals the asset pledges assist.
	We are ALSO implicitly obligated to Buffer MR W.
	We dont want the client to be the Borrower; we wants him/her to be the Pledger.
	We certainly wants the structure to avoid having his huge rewards characterized as USURY.
	We certainly want to avoid constant examination and re‐examination of his pledged assets on every financing.

Let's cut to the accurate, candid description of what we are to do:

We are to use the clients pledged assets to enhance deals that don't really need enhancement, and collect as much rewards as we can for driving these deals forward now. Further, we are to create instruments which the client can use to do it again and again and further magnify his considerable wealth.

Please consider the nature of the enhancement as structured. If $10,000,000 in enhancement occurs derived from the clients asset pledge; What does the client get paid? 10% on $10,000,000 immediately = $1,000,000. What does the client get paid during the first year? 2.5% per quarter on $10,000,000 for four quarters= another $1,000,000 ...So during the first year the client's "$10,000,000 credit enhancement" paid him $2,000,000 bucks. Now observe:

What is the MAXIMUM PAYOUT the client's pledge could be drawn on via the "credit enhancement"???????????? *ZERO*! The exposure is always limited to ensuring payments of interest and during the first year those payments are escrowed in the supported financings.

In fact, the wisdom of the client using his assets via pledge for enhancement is that despite sounding like big principal balance numbers on which the client gets paid on.... He knows that his worst case exposure in a given year is simply that years interest payment (if it is not already escrowed); and he knows that the deal he cut brings him annual fees GREATER that years interest expense true enhancement! Further, the client knows the Land Value already exceeds even the nominal enhancement figure; so he would make‐out‐like a bandit if he ever claimed title for himself.

Further still the client knows that we enter a tax assessment agreeement which commutes to him in the absurd position of a future default which enables the land/property to be taxed for the client's benefit until the end of time or total shortfall recovery.

Further, Improvement Bonds can be stretched thirty or forty years which means that if the client ever needed to.... he could simply run tax free 4.5% carry on the property while it became more and more valuable until he sold to clear or refinanced.

The client should pledge the assets to a Single Purpose Entity which he has a stranglehold on via Operating Agreement and UCC1 or whatever device including Super‐Priority‐Preferred he wishes. That means He pledged but did not borrow.

Next we will take that Pledged Asset(s) and create a plain vanilla universally accepted standing letter of credit at the Single Purpose Entity level. By doing this we protect the client from constant examination and re‐examination of the clients assets.

We make the Bond Issues fly through and get quickest fees and best equity kickers to the client. Importantly, it also positions us to take advantage of a George Bush parting gift whereby we can roll even a single‐A Bank LC into a AAA FHLB Guarantee WITHOUT DISRUPTING THE TAX FREE STATUS of the Improvement Bond used for Infrastructure.