Global Project Financing Group, LLC.,

      The “No Interest” Structured Collateral Loan Program Overview

The “CD Program”, named for its use of Certificate of Deposit (CD) instruments as collateral for project financing, is one of the fastest systems for structured capital loans, using collateral from a third party investor. The result is the equivalent of an “interest free” loan (from the point of view of the client) in most cases, where the Client repays only a discounted amount of Capital, with minimal risk and maximum benefit to both the bank and the company.

The “Program” itself is a method, or mechanism, of structuring third party collateral into the loan or funding package for project financing. Since this structure must be implemented through a series of complex contracts between multiple participants in the transaction, the CD Program must be managed by Global Project Financing Group.

Implementation of the loan structure in practice is simple and straightforward. The majority of the steps and mechanisms involved are not noticeable to and do not involve the Borrower company.

The primary function of the structure is to procure a collateral provided from a third party at a “discount”, and arrange for it to be paid for by the borrower company from the loan funds at the time of closing. The result of the structure is that the borrower receives a net amount of capital that it needs to implement its project at a cost lower than a traditional loan, the collateral provider receives immediate repayment of the collateral plus profits, and the bank receives full collateral backing of the total principal loan amount.

The ability of the structure to reliably generate a “win-win-win” transaction for all participants is made possible by the fact that the CD instrument used as collateral doubles in value over a 10 year period. This increase in value from maturity of the CD makes it possible to provide real and tangible benefits for all parties to the transaction. All other expenses related to structuring the loan and procuring the collateral are added to the amount of the loan, to ensure that they are paid from loan proceeds.

The Borrower company receives a loan for an approximately “doubled” loan amount, usually 235% of the capital needed for the project. Upon closing of the loan, Borrower from his borrowed funds instructs the bank through its escrow department or closing agent to return to the Depositor 50% of the CD purchase amount. The bank at this time allows Depositor to assign the future interest payments from the CD “interest certificates” to a third party. These “interest certificates” will be sold to a third party for more than 50% of their value as repayment of the other 50% of the CD purchase amount plus a profit for Depositor. What remains is the original principal deposit of the CD, which is worth 100% of the “doubled” loan amount, thus fully securitizing the bank’s loan.

The result is that Borrower has technically repaid the full amount of the loan on “day one”, and thus will NOT have to repay it later. The only thing remaining that Borrower must pay is the interest on the loan during 10 years, thus making it an “interest only” loan (from the Bank's point of view).

Although these steps from a legal and technical viewpoint are separate and sequential, in practice they are implemented simultaneously at the time of closing. This is accomplished by preparing all of the interrelated contracts for all steps in advance, for signing at the same time in one “batch” transaction. The closing transaction is performed using “Escrow”, which means that the bank will pay the net working capital funds for the project to Borrower at the same time as the Depositor is paid for the CD.

Since the loan is “interest only” (from the bank's point of view), Borrower repays only 100% of what it received for the project. That is why it is called the “ equivalent” of a zero % interest loan (from the Borrower's point of view).