RISCfp, a financing solutions advisory and platform management company, today announces the inaugural issue of its managed treasury pool (MTP) notes, enabling insurers, institutional investors, corporate treasurers and others needing to diversify or reduce their short-term investment risk as they pledge collateral, and to do so with unprecedented efficiency.
Labelled RISCMTP-Notes, these notes are a Moody’s-rated [“(P)Aaa(sf)”], listed, debt security combining the liquidity of high-quality bank deposits with the superior quality and managed returns of government money market funds.
Derrell Hendrix, CEO of RISCfp, said: “RISCMTP-Notes are designed to serve as versatile investment and collateral instruments that are more liquid, capital-efficient and secure than short-term credit securities and bank deposits [e.g. commercial paper and CDs], prime money market funds and ETFs. In short, investors’ money works harder and more reliably with RISCMTP-Notes, the latest in a long line of market innovations that RISCfp and its affiliates have fashioned to meet critical needs in the financial markets.”
Insurers and re-insurers, institutional investors, corporate treasurers and others regularly face the requirement to access liquidity and pledge collateral to meet their investment or financing needs. The market alternatives available to meet these needs include cash (e.g. a bank deposit to secure a letter of credit), in-house or separately-managed accounts (e.g. holding US Treasuries) and investments in credit assets (e.g. short and medium-term credit securities). Each of these alternatives presents challenges that RISCMTP-Notes have been designed to address, including credit concerns, liquidity constraints, collateral eligibility, and operating costs, as well as expert asset management expertise and market risk (e.g. “run-on-the-bank” risk).
RISCMTP-Notes represent a proportional interest in the assets backing the notes (i.e. US Treasury bills and notes and temporary assets such as government money market funds [GMMFs] and cash), and are redeemable annually at par. They may be redeemed at any other time for same-day value by transferring the investor’s share of each asset in the portfolio (i.e. a “vertical slice”) to a redemption account where, at the investor’s option, they may either be delivered to the investor or sold at market prices (i.e. the liquidated asset value, or “LAV”). The issuer and investor right to redeem annually at par is rated (P)Aaa(sf) by Moody’s.
The following are supporting RISCfp to deliver RISCMTP-Notes to financial markets:
- BNY Mellon, custodian
- Merganser, investment manager
- Waystone, operations support
Notes for securities finance professionals:
- RISCfp has previously worked with affiliate Karson Management, which has issued similar types of K-Note products.
- Roy Zimmerhansl is listed on the corporate website as part of the management team.