What is a "Private Placement*
- A private placement is the sale of securities to a relatively small number of select investors as a way of raising capital. Investors involved in private placements are usually large banks, mutual funds, insurance companies and pension funds. A private placement is different from a public issue, in which securities are made available on sale on the open market to any type of investor.
What is "Monetization*
- Monetization is simply an offer to purchase the bank drafts / IBOES at a certain percentage of the FV of the bank draft / IBOE.
- The purchase is outright, hence, the deal is finished after the payment. The following preliminary requirements (not limited to the list below as additional documents may be required) and procedures are strictly implemented:
- 1. Letter of confirmation from drawee bank for bank drafts, which should not be older than 3 days and UCC Financing Statement for IBOEs. If the BCL is older than 3 days, we will ask for an updated one.
- 2. Copy of the bank draft cheque / IBOE, which should be a minimum of 100M Euro / USD and issued by major European banks for BDs.
- 3. Passport copy of BD / IBOE holder.
- 4. Upon submission, all documents, which are not necessarily limited to the above mentioned requirements, shall be verified with drawee bank, FED, Interpol, etc. for due diligence.
- 5. After due diligence, a TTM is scheduled in Europe and a contract will be drafted and signed by concerned parties, based on agreed terms and conditions.
- However, there is another option by which a client can transact. And this is by placing the funds, also equivalent to a certain percentage of the FV of the cheque, to a private trading program or Private Placement Program (PPP).
- What is a 'Private Placement'? Investopedia defines private placement as ... "the sale of securities to a relatively small number of select investors as a way of raising capital. Investors involved in private placements are usually LARGE BANKS, mutual funds, insurance companies and pension funds. A private placement is different from a public issue, in which securities are made available for sale on the open market to any type of investor."
- In this case, the funds are endorsed to a PPP, which will normally run for 40 weeks with a yield of a certain percentage of the investment and will be paid on a weekly basis.
- All the other requirements and procedures for bank draft / IBOE monetization are, likewise, applicable. In addition, the mechanics of said program shall be discussed in detail in the TTM, which will be scheduled after documents and holder undergo and pass due diligence.
- Both options have their advantages and the client, if undecided, is free to explore these options at TTM, again to reiterate, only after due diligence.
- The procedures are designed to filter fraudsters and scammers. Hence, there will never be any room for fraudulence and scams.