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What are the Benefits?

June 4, 2017

RRM Better Financial Engineering for Borrowers and Lenders

 

This introduction brings forth a cutting edge concept that is aligned with our efforts to remain a reformer and a revolutionary for the capital formation markets; coupled to the philosophy of service to our clients.  This concept delivers on the strategy for simpler, superior intellectual investment technology.

 

The method this concept utilizes, produces output that is consistent and far more predictable than other forms of nominal and inflation adjusted methods of capital formation.

 

RRM is a fully-patented business method that starts in real (inflation adjusted) terms and calculates out the equivalent nominal terms for use in regulatory compliance, accounting, payment, clearing, etc.

 

What is RRM?

RRM is a system for precisely calculating the number of dollars required to meet an obligation defined in real, constant value dollars.  It also provides a complete methodology for servicing inflation-indexed loans and securities. 

What do Borrowers gain from RRM?

  • It cuts your debt service payments over the first half of the loan life as much as 40%.  This makes any given borrowing more affordable and improves your coverage ratio.

  • It protects against sharp increases in your payments as often happens with adjustable rate mortgages or variable rate loans.

  • The savings from the lower debt service in the first half of the loan exceeds the present value cost of higher debt service later.

How do Lenders benefit from RRM?

  • It protects your investment fully against inflation.

  • It reduces the risk of default by those to whom you lend.    

  • RRM is fully amortizing, eliminating balloon payments and sinking fund requirements.

 

Borrowers and lenders can both benefit from the use of RRM in the debt structures they enter into.  Real purchasing power (inflation immunized) financing provides both borrowers and lenders with a better financing outcome.

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