The Corporation then issues corporate debt for sale. The corporate debt is used as collateral for bonds that are sold in the capital markets. The proceeds from the sale of the bonds fund the corporation for the specific purpose of acquiring and operating the revenue generating real property assets. A portion of the proceeds from the sale of the bonds is used to fund a Credit Enhancement Account ("CEA"). The CEA serves as a reserve account that pays principal and interest on the corporate debt if and when the corporation cannot.
The bonds are insured and protected from default by a financial guaranty rated "AAA" that guarantees both the Corporation's payment of principal and interest on its corporate debt and the investor's repayment of principal and interest from his/her/its investment in the bonds.
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