Efficiency

Established Legal Documentation

All client collateral transactions are executed via similar structures and over the same platform. As a result, Karson is able to offer a full suite of existing legal documentation that has been developed in conjunction with a number of concluded transactions. Using a standardized approach benefits clients by minimizing the impact on:

  • Client management resources
  • Legal review time and costs
  • Rating agencies
  • Regulatory review and acceptance

The Karson approach is to give clients and their legal counsel access to specimen versions of all existing documentation required to conclude a transaction. It is expected that clients and counsel will thoroughly review all specimen and definitive documentation in relation to the first transaction, but to a far lesser extent in relation to subsequent transactions.

Service & Capacity Provider Buy-in

With $8.2 billion in transaction capacity delivered to date, a number of key service and capacity providers have demonstrated their willingness to support the Karson platform.

  • Major securities lenders
  • Major international banks
  • Major law firms representing clients, BNY Mellon and capacity providers
  • BNY Mellon (which provides the core operational and trustee services)
  • Standard & Poor’s
  • State insurance regulators
  • Other clients

Platform Scalability

Most aspects of the Karson process have been standardized via the BNY Mellon platform. As a result, Karson is able to scale the volume of collateral delivered to its clients through standardized legal entities and legal documentation that is easily replicated for future transactions. Clients seeking to execute multiple transactions benefit from a streamlined transaction implementation process over time with faster:

  • Internal approvals
  • Capacity provider credit/risk committee approvals
  • Regulatory approvals and
  • Desired ratings

Karson also provides a proven, reusable structure that has been fully vetted and approved by:

  • Other clients
  • Major securities lenders
  • Major international banks
  • State insurance regulators
  • The Securities Valuation Office of the NAIC
  • Major law firms representing clients, BNY Mellon and capacity providers
  • BNY Mellon (which provides the core operational and trustee services)
  • Standard & Poor’s

Access to Loyal Capacity

Karson provides efficient access to alternative sources of capacity that are able to, given the Karson structure, provide low cost liquidity. Karson works with financial institutions that rely on its structuring expertise (Karson does not typically work with large banks with dedicated structured insurance solutions groups). Karson therefore offers:

  • more efficient access to available capacity that may be lacking in adequate limits and/or workable structures from banks, institutional investors and CDS providers
  • ease of access for capacity providers, who can participate using approved and established products including, conditional or unconditional letters of credit, derivatives contracts (credit derivatives and total return swaps), securities loans, contingent loans, and/or insurance/reinsurance contracts