Structured instrument · illustrative sizing
A principal-protected growth instrument.
A five-year note collateralized 1:1 by U.S. Treasury STRIPS, a 20% warrant, and a policy that can be claimed at any time — one unit, three parts.
Note · face
$43.11mm
Five-year bullet, collateralized 1:1 by UST STRIPS bought at 81.50¢.
Warrant · 20%
Fully diluted
Fully diluted at closing, nominal strike, vests at maturity or on default.
Policy · anytime claim
81.50¢ → 100¢
Claim any fraction of the STRIPS at any time; STRIPS reach par at year 5.
Raise $43.11mm = Note face $43.11mm = STRIPS face $43.11mm
Every dollar advanced is covered by the Note and collateralized at par value at maturity.
Use of each $1.00 lent
Closing proceeds are applied in fixed proportions. Only the growth capital line reaches the Project.
Hover or focus a segment for detail
- STRIPS 81.50¢
- Growth capital 11.60¢
- Policy premium 4.92¢
- Coupon reserve 1.23¢
- Broker fee 0.50¢
- Dealer fee 0.25¢
| Application | Cents / $1.00 | Amount |
|---|---|---|
| Insurance Company cell capital contribution → 5-yr UST STRIPS (0.815 → 1.00) | 81.50¢ | $35,132,426 |
| Growth capital deployed by Project | 11.60¢ | $5,000,000 |
| Policy premium — cell tax prefund | 4.92¢ | $2,119,896 |
| Coupon reserve — Lender tax-matching escrow | 1.23¢ | $531,645 |
| Broker upfront fee (0.50%) | 0.50¢ | $215,536 |
| Dealer custody upfront fee (0.25%) | 0.25¢ | $107,768 |
| Total | 100.00¢ | $43,107,271 |
Illustrative example only; all figures are hypothetical. Not an offer, a solicitation, or tax, legal, insurance, or investment advice.
Three pillars
Principal protection with anytime liquidity
The policy allows a claim on any fraction of the STRIPS at any time — no default, no consent, no sale process. Claims settle in kind: delivered STRIPS satisfy the Note at full maturity value while the Lender realizes accreted value, converging to par at year 5.
Cash-neutral taxation
The stated coupon of $106,329/yr is sized to exactly 21% of each year's interest income, so it pays the tax on itself and on the $2.00mm of OID — which equals the warrant allocation to the dollar. The Lender is never out of pocket on phantom income.
Uncapped upside that survives default
The 20% warrant vests on repayment, participates in any sale or IPO, and is retained in full even on a maturity default — protection and upside are never mutually exclusive.
Outcomes at a glance
Modeled outcomes at $5MM net to Project sizing. The FAIL case is the floor, not a loss case.
FAIL
1.00x after-tax (1.01x gross)
IRR 0.247% · CAGR -9.7%
LOW
2.08x
IRR 15.796% · CAGR 38.8%
BASE
5.52x
IRR 40.807% · CAGR 82.1%
HIGH
14.34x
IRR 70.412% · CAGR 125.3%
Illustrative example only; all figures are hypothetical. Not an offer, a solicitation, or tax, legal, insurance, or investment advice. Cash-neutrality assumes a 21% federal corporate rate; state tax, other rates, and AMT/BEAT/CAMT change the required coupon.
One instrument, one document