Our Products

Collateral Adapter™

Enables an illiquid asset holder to obtain the standby letter of credit required for an Enhancement CPC™ investment (“Letter of Credit”) in reliance upon the high-quality liquid assets (“HQLA”) owned by a second party as the “HQLA Sponsor”.

Indemnified Collateral Adapter™

Operates like a standard Collateral Adapter, except the HQLA Sponsor is indemnified against loss by a participating insurance carrier in the event of an unreimbursed draw of the Letter of Credit; designed for HQLA Sponsors that have a limited investment mandate yet still seek to enhance their portfolio performance.

Trade Vault™

Constitutes a pool of capital that may be utilized by CSS to warehouse multiple CPCs™ or Enhancement CPCs™ that qualify for investment under a particular Trade Vault’s mandate; designed to deliver risk mitigated returns and support secondary market trade liquidity of the CPC marketplace.

High-Quality Illiquid Assets (“HQIA”) are offered as collateral to an HQLA Sponsor selected by CSS such that HQLA Sponsor will use its High-Quality Liquid Assets (“HQLA”) to secure a Letter of Credit on behalf of HQIA Owner

Scenario: A holder of suitable High Quality Illiquid Assets (“HQIA Owner”) seeks to invest in an Enhancement CPC™ series, requiring the issuance of a Letter of Credit.

Collateral Adapter™

HQLA are value-protected at all times up to a maximum of 4 times their value

Balance Sheet Friendly – HQIA pledge and Letter of Credit may qualify as contingent liabilities and “footnoted”

In event of default, HQLA Sponsor recovers against the HQIA upon an unreimbursed draw of the Letter of Credit

Generally, limited disruption of unlevered fund or portfolio strategies

At term, when there has been no default, Letter of Credit is cancelled and all pledges and collateral assignments are released

HQIA is periodically independently valued by approved firms

HQLA Sponsor has asset substitution optionality at all times

Typically, 1-, 3-, or 5-year term

Indemnified Collateral Adapter™

Scenario: HQIA Owner seeks to invest in an Enhancement CPC™ series, requiring the issuance of a Letter of Credit. HQLA Sponsor is willing to cause the issuance of the required Letter of Credit against the HQIA, but the form of HQIA is not consistent with HQLA Sponsor’s investment mandates. In such case, the HQLA Sponsor requests an indemnification that protects its HQLA in the event of an unreimbursed Letter of Credit draw.

HQLA are value-protected at all times up to a maximum of 4 times their value

HQIA are offered as collateral to an HQLA Sponsor selected by CSS such that HQLA Sponsor will use its HQLA to secure a Letter of Credit on behalf of HQIA Owner

HQLA Sponsor has asset substitution optionality at all times

HQIA is periodically independently valued by approved firms

Typically, 1-, 3-, or 5-year term

Balance Sheet Friendly – HQIA pledge and Letter of Credit may qualify as contingent liabilities and “footnoted”

In event of default, HQLA Sponsor recovers against the HQIA upon an unreimbursed draw of the Letter of Credit. If HQIA cannot be timely liquidated or produce a shortfall of proceeds to offset at-risk HQLA, HQLA Sponsor may draw upon insurance indemnity and insurer recovers against HQIA

Generally, limited disruption of unlevered fund or portfolio strategies

At term, when there has been no default, Letter of Credit is cancelled and all pledges and collateral assignments are released

Trade Vault™

Scenario: HQLA Sponsor seeks investment exposure to a curated revolving warehouse facility operated by CSS consisting of multiple risk-mitigated CPC series that produce outsized, diversified investment returns to the HQLA Sponsor.

HQLA can be used to obtain a Letter of Credit to acquire a Master Enhancement CPC™ in support of the operation of a particular Trade Vault by CSS

A Master Enhancement CPC series credit enhances each segregated Trade Vault, resulting in cash funding into each Trade Vault

Qualifying CPCs purchased by a Trade Vault are required to have a minimum of 9-months of interest/debt service reserve on account on the date of purchase

Funded proceeds are used by CSS to acquire individual CPCs that may be held on the Trade Vault for up to 9 months with a flowthrough of returns to the HQLA Sponsor after deduction of Trade Vault operating expenses

Each Trade Vault possesses a defined CPC eligibility and compliance criteria as to nature of CPCs that may be purchased

Returns consistent with the nature of CPCs held, even though CPC default is heavily de-risked while within the Trade Vault

All CPC purchases by a Trade Vault are transparent to and auditable by the HQLA Sponsor

The Enhancement CPC™

An Enhancement CPC grants a unitized, fractional ownership interest in a single source credit enhancement facility. Today, there is virtually no direct commercial competition for the Enhancement CPC™.

The CPC market can fundamentally change the way that credit is originated by lenders and viewed by investors.

CPCs are a non-derivative, credit asset class that are directly secured by underlying collateral

The Enhancement CPC™ is acquired using an undrawn Standby Letter of Credit that credit enhances a target investment

All CPCs conform to the terms of a global Master Participation Agreement for purposes of standardization

Standardization promotes more ready resale and trade among investors

CPCs were discussed at COP26 to support a range of humanitarian and ESG programs

The Letter of Credit is intended to remain undrawn, except primarily upon default, making the Enhancement CPC an exceptional cashless investment vehicle that drives investment yield enhancement

FAQs and Key Notes

    • HQLA Sponsors have transparency and access to HQIA information required to perform due diligence

    • The nature of HQIA collateral will vary, making it ideal to satisfy a wide range of risk appetites

    • Valuations of HQIA are performed on a regular basis by recognised professional firms acceptable to all parties

    • Balance sheet treatment of Letters of Credit issued are typically “footnoted” as a contingent liability

    • ESG Credit recognition will pass through to HQIA Owner and HQLA Sponsor based upon nature of CPC or HQIA collateral

    • CSS fees are generally based upon limited administrative fees plus a percentage of the Letter of Credit value

    • HQLA Sponsors have transparency and access to underlying CPC information required for due diligence

    • Maximum hold period for CPCs on a Trade Vault is 9 months

    • All CPC series eligible for deposit in a Trade Vault require a cash reserve for debt service during the maximum permitted hold period

    • Cash reserves embedded in each acquired CPC protect against LOC draw and underlying CPC default while held on Trade Vault

    • CPCs are assigned CUSIPS to accommodate secondary market resale and trade prior to maximum Trade Vault hold period

    • HQLA Sponsor granted right of first refusal to purchase CPCs deposited on a Trade Value that it sponsored

    • Returns reflect the nature of CPCs placed on the Trade Vault; outsized return compared to de-risked Trade Vault features

    • CSS receives administrative fees and participates in CPC returns