Credit Products
Credit Innovation
“CPCs™ are not derivative products. However, they are derived from the fractionalization of two source credit types; “Funded Credit”, such as loans and cash lines of credit, or “Unfunded Credit”, such as credit enhancement facilities.”
UFT Commercial Finance has pioneered the design and commercialization of a new credit asset class, the Master Credit Participation Certificate™, or CPC™. Fundamentally, CPCs™achieve their objectives of transparency, shared trust, liquidity, and accountability through governance under a globally standardized set of master terms and conditions. This master rules set forms the basis for the suite of 26 unique CPC™ products that have been developed. Together, CPCs™address virtually any type of credit that can be originated -- even ones that are underpinned by private equity! At the same time, UFT Commercial Finance is a company that believes in continuous and agile innovation. As markets move, causing investors to seek different types of investments or projects to seek alternative funding approaches, new kinds of CPCs™ can be easily added to our product suite to meet those needs.
Funded Credits
Funded Credits start with loans or credit lines that are fractionalized to produce conventional CPCs™. These products are cash-purchased and behave somewhat like other credit investment products such as bonds or securitized instruments. However, the over-arching standardization and fundamental re-engineering of the credit structures used to deliver a CPC™ differentiate them from these type of legacy credit products. CPCs™ are different because:
Pricing is more efficient through the use of a standardized set of terms and conditions that is then further tailored to a specific CPC™product;
Market liquidity can be more readily driven through the emergence of a financial exchange exclusive to CPCs™; and
Tradeability is inherently stronger since the use of a consistent credit structure allows the buyer and seller to focus their dialog almost expressly on underlying collateral, performance, and yield.
These fundamental differences mean that CPCs™ are more readily able to assist almost any qualified loan originator in a global marketplace to distribute their loans to pre-qualified investors with less costs, a faster close, and lower principal loan values than previous strategies potentially allow.
Unfunded Credits
Unfunded Credits drive the advent of Cashless Investment™. This significant innovation in the world of credit is the commercial manifestation of an abstract economic theory developed by our Founder, Joanne Marlowe, known as "Modern Credit and Investment Disaggregation Theory" (see the Documents page for a white paper on the subject). At its core, this Theory is built upon the idea that if you separate investment appetite and available capital into two disparate investment groups, it follows that the number of investors in each group will naturally increase. Then, when you bring these two groups back together, you increase the likelihood of successful investment execution because you will have more potential combinations of investors that together marry appetite with cash.
A qualified investor, known as a "Participating Lender", satisfies their credit appetite through the purchase of an Enhancement CPC™. Unlike a Funded Credit, the Participating Lender purchases the desired credit exposure and associated yield without making a cash payment. Instead, the purchase consideration for an Enhancement CPC™ comes in the form of a specific type of "credit enhancement" of the target investment or project being invested. In this way, a purchaser of an Enhancement CPC™ gains access to a new source of yield that can be positioned to enhance the performance of an investor's broader investment portfolio.
“Simply stated, Investment Disaggregation Theory recognizes that the anatomy of any investor’s decision to go forward with an investment embodies two core components — the investment appetite, or desire, to make a particular investment and the available capital to actually make that investment.”
CPC™ Product Suite Profiles
Cash-Funded Products
Receivables CPC™
High-quality short-term receivables risk payable by governments and commercial enterprises
C-BIC™
Cash-backed investment grade insurance carrier risk
Commercial CPC™
Senior-secured credit exposure to mid-market loans, real estate, manufacturing, and an array of other qualifying assets
Infrastructure CPC™
Large-scale project finance underpinned by innovative Public-Private Partnership Strategy
Flex CPC™
Standardized and trade-ready alternative to revenue bonds or qualifying royalty-based revenue streams
Trade Finance CPC™
Physical delivery revolving commodity trade exposure; virgin investment grade or blended credit quality
Bank Portfolio CPC™
Bulk acquisitions of mid-market bank-quality loan portfolios; alternative to direct credit fund of lending exposure
Aggregation CPC™
Non-derivative based direct alternative to the purchase of securitized investment products
Mezz CPC™
Higher-yielding subordinated credit exposure; fractionalized mezzanine debt
Cashless Investment™ Products
Private Equity Enhancement CPC™
Private equity exposure in a "credit wrapper"; introducing a whole new way to position private equity as a portfolio yield enhancement
Special Enhancement CPC™
Hybrid of senior-secured cashless investment with a mezz-like bonus payment at term; portfolio yield enhancement vehicle
Commercial Enhancement CPC™
Senior-secured cashless exposure secured by tangible assets and real estate; portfolio yield enhancement product
Charitable Enhancement CPC™
Cashless vehicle for funding high-value charitable contributions and endowments
Fund Enhancement CPC™
Alternative investment fund and hedge fund exposure without investment cash; moves investment fund-based investments into an Enhancement Portfolio
Infrastructure Enhancement CPC™
Large-scale, long-dated exposure to infrastructure investments positioned as a source of long-term portfolio yield enhancement
Premium Enhancement CPC™
An alternative method for cost-effectively meeting large-scale life insurance needs through an unfunded, self-sponsored credit enhancement structure
Trade Enhancement CPC™
Exposure to commodities traders and producers through the establishment of private credit facilities for purposes of trade finance and supply chain finance needs
Portfolio Enhancement CPC™
Efficiency in acquiring portfolios of "chunky" senior-secured, mid-market [bank] credit exposure as an alternate to direct lending strategies
Receivables Enhancement CPC™
Revolving exposure to single class or blended portfolios of receivables obligations as underlying collateral without engaging in a receivables purchase model (factoring) or securitization model
Aggregation Enhancement CPC™
A "cashless" alternative to purchasing into securitized asset or loan baskets
Mezz Enhancement CPC™
Subordinated credit exposure with mezz-like returns that can be positioned as a consistent yield enhancement product in an investment portfolio
Bond Enhancement CPC
Fee-based exposure to commercial contract performance; private method for sourcing the equivalent of performance bonds on qualifying company performance
Membership Enhancement CPC™
Cashless method for achieving member-status in an energy commodity trade finance platform offering 7x-10x enrollment facility capacity