PRODUCTS
FINANCIAL GUARANTY
Financial guaranty (FG) is the transfer of payment risk on
a financial obligation from the creditor or investor to an insurer.
Typically involve a transfer of risk from the CREDIT marketplace
or the CAPITAL marketplace to the insurance marketplace.
FG transfers only the risk of payment failure.
Financial guaranty products are similar to
traditional property/casualty products in that they provide
indemnification for losses in accordance with the specific requirements
and conditions of a contract.
EXAMPLES
REAL ESTATE
In the form of a asset backed security a
loss may be payable in any of the following events: the failure
of an obligor on a debt instrument or any other monetary obligation
to pay principal, interest, purchase price or dividends when
due as a result of default. Financial guaranty indemnifies losses
arising from negative credit or payment events.
CREDIT ENHANCEMENT
To improve the credit rating, a contract
will be issued by Ravelin guarantying the loans principal against
default by the borrower
INVESTMENT RETURN
A guaranty against the risk of loss for value
of principal and interest
OIL AND GAS
A guaranty against an oil fields production
falls short and borrowed principal cannot be repaid.
Exclusions
The Ravelin product that has been presented can be issued in
many contractual forms. The following exclusions
are mandatory:
TERRORISM
There is no coverage provided for losses resulting from certified
acts of terrorism, such losses may be partially reimbursed by
The United States Government.
BANKRUPTCY
The guaranty will become null and void if during the period of
the contract the obligor declares bankruptcy.
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