RISCfp announces inaugural issue of its managed treasury pool (RISCMTP) notes
- Written by Media Outreach
Labelled RISCMTP-Notes, these notes are a Moody's-rated "(P)Aaa(sf)" and listed debt security combining the liquidity of high-quality bank deposits with the superior quality and managed returns of government money market funds.
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. Over and above their stand-alone return, liquidity and utility attributes, the Notes are structured to avoid run and contagion risk and, as such, RISCMTP-Notes may lower the investor's exposure to hidden risks in the short-term investment market.
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 for cash at market prices for the liquidated asset value ("LAV"). The issuer's and investor's right to redeem annually at par is noted in the (P)Aaa(sf) rating by Moody's, as set out in their RISCMTP-Note Pre-Sale Report.
RISCMTP-Notes are an effective complement to other holdings in that they support growing investor appetite for safe short-term investments in a manner that bolsters the overall market resilience, answering calls from regulators for scalable investment solutions that promote enhanced financial stability.
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 (e.g. commercial paper and CDs), bank deposits and prime money market funds. They also provide greater flexibility as a collateral vehicle than ETFs and government money market funds. While it is the latest in a long line of market innovations that RISCfp and its affiliates have developed, the potential scope of the MTP asset class goes well beyond anything we have ever attempted in our 27-year history."
The long-term potential for RISCMTP-Notes is to provide not just a flexible, liquid and high-quality collateral asset for supporting reinsurance capital and reserves, but an asset class that has a broader stabilising effect on the global 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 and financing needs. While market alternatives such as cash (e.g., bank deposits), US Treasuries, and investments in credit assets (e.g., short and medium-term bank and corporate securities) are available to meet the needs of these industry players, RISCMTP-Notes were created specifically to address challenges such as credit risk, liquidity risk, collateral eligibility, and operating costs, as well as an investor desire to obtain expert asset management expertise efficiently while minimizing systemic risk (e.g., avoiding "run-on-the-bank" risk).
The following are supporting RISCfp to deliver RISCMTP-Notes to financial markets:
- BNY Mellon, custodian roles including paying agent, trustee and custodian
- Merganser, investment manager of inaugural issue
- Centaur, a Waystone Company, operations support
Hashtag: #RISCfp
The issuer is solely responsible for the content of this announcement.
