Underwriting and Credit Process

Moody’s – We use Moody’s to risk asses and rate our transactions, being one of the market leaders for Ratings on bond investments, their analyses provides us with a credit rating for the transaction which is then Indexed to provide a ROI (Return on Interest) for our investors.

The stronger the project, the better the rating and lower the pricing!

Initial Credit Assessment – All projects will go through an initial credit rating with Moody’s, this is where they will carry out all the Due Diligences on project and the sponsors. It will include a in depth review as well as a site visit to understand the local market and a chance
for them to meet the Sponsor.

Once the full funds have been pledged for the project, Moody’s will carry out the remaining Due Diligence and analyses for the bond and our investors.

The Process

Purpose

The system of rating securities was originated by John Moody in 1909. The purpose of Moody’s ratings is to provide investors with a simple system of gradation by which future relative creditworthiness of securities may be gauged.

Rating Symbols

Gradations of creditworthiness are indicated by rating symbols, with each symbol representing a group in which the credit characteristics are broadly the same. There are nine symbols as shown below, from that used to designate least credit risk to that denoting greatest credit risk:

Aaa Aa A Baa Ba B Caa Ca C

Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from
Aa through Caa.

Absence of a Rating

Where no rating has been assigned or where a rating has been withdrawn, it may be for reasons unrelated to the creditworthiness of the issue.
Should no rating be assigned, the reason may be one of the following:

  1. An application was not received or accepted.
  2. The issue or issuer belongs to a group of securities or entities that are not rated as a matter of policy.
  3. There is a lack of essential data pertaining to the issue or issuer.
  4. The issue was privately placed, in which case the rating is not published in Moody’s publications.

Withdrawal may occur if new and material circumstances arise, the effects of which preclude satisfactory analysis; if there is no longer available reasonable up-to-date data to permit a judgment to be formed; if a bond is called for redemption; or for other reasons.

Changes in Rating

The credit quality of most issuers and their obligations is not fixed and steady over a period of time, but tends to undergo change. For this reason, changes in ratings occur so as to reflect variations in the intrinsic relative position of issuers and their obligations.

A change in rating may thus occur at any time in the case of an individual issue. Such rating change should serve notice that Moody’s observes some alteration in creditworthiness, or that the previous rating did not fully reflect the quality of the bond as now seen. While because of their very nature, changes are to be expected more frequently among bonds of lower ratings than among bonds of higher ratings. Nevertheless, the user of bond ratings should keep close and constant check on all ratings — both high and low — to be able to note promptly any signs of change in status that may occur.

Investment / Source of funding

Our Bonds are raised from Two market places:

1. Public Market – Funds such as:

2. Private Market

Israel’s market is continuously growing due to four main reasons, Israel has new wealth coming from IPOs and entrepreneurial ventures mainly in the high tech sector; second, the country attracts high net worth Jewish people to relocate using a flexible tax regime. Also, as a young country Israel is reaching the 3rd generation stage, which is the generation that requires more consulting and guidance than any other and finally, together with a relatively strong and stable economy, we have a market that offers a great opportunity for international service providers in the wealth management arena.

Time ScalesBond Terms

We can issue our Bonds for 2 – 5 years, in some instances we have the ability to build in an “extension” for beyond of the 5th years for a maximum of an additional 5 years.

Bond Issuing Process

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