K-Note Markets

Parties requiring collateral can receive a K-Note to support a variety of business or investment needs by entering into a transaction with Karson Collateral (a Collateral Transaction) under which they request issuance of a K-Note.

The K-Note is issued on behalf of a client (Client or client entity requesting the issuance of a K-Note, the Applicant) for the benefit of a specified party (the Beneficiary) where the Beneficiary will have the right to draw on (i.e., demand payment) if pre-agreed events / conditions are met.

The K-Note, while originally designed as an alternative form of collateral for life insurance reserves under Regulation XXX, can be used to meet the collateral requirements related to other insurance and non-insurance areas.

Ongoing and increasing collateral requirements for:

Increased Capital Adequacy, Risk-Based-Capital and Liquidity requirements for competitors:

  • Basel III
  • Solvency II
  • Rating Agency requirements
Financing
  • Banks seeking to reduce balance sheet aggregates
  • Equipment leasing companies seeking financing for new equipment

Derivatives Collateral

 

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