Ironwood Capital and Dignity Partners completes the first ever asset securitization of viatical settlements in the amount of $35 million.
HARTFORD, Conn.--(BUSINESS WIRE)--March 2, 1995--Ironwood Capital Partners Ltd. today announced the private placement of a $35 million viatical settlement securitization transaction for Dignity Partners Inc. of San Francisco, Calif.
Ironwood Capital and Dignity Partners believe that this is the first ever securitization of this unique asset class. Dignity Partners is engaged in the business of making viatical settlements, that is, the purchase of life insurance policies of terminally ill individuals. The availability of financing for viatical settlements is particularly important to individuals with terminal illnesses because viatical settlements enable such people to generate immediate, and often much-needed, cash that would otherwise be unavailable to them.
Ironwood Capital initiated, structured and acted as the exclusive placement agent for this transaction. Dignity Partners is a wholly owned subsidiary of The Echelon Group Inc., a financial services and investment firm, also of San Francisco.
The transaction involved the sale of pooled viatical settlements sold by Dignity Partners Inc. to a special purpose subsidiary, Dignity Partners Funding Corp. I, which issued senior notes to two institutional investors. The transaction is rated "A" by Standard & Poor's.
o A significant feature of this transaction is the incorporation of a non-amortization period during which interest only is paid on the notes for the first eighteen months of the transaction. The principal that would otherwise have been repaid during the non-amortization period is reinvested in additional viatical settlements. This has the effect of lengthening the expected average life of the notes from approximately 1.5 years to 2.5 years.
o Also incorporated into this transaction is an option to increase the issuance to $50 million.
o The initial pool consists of viatical settlements on life insurance policies with an average face value of about $75,000.
Dignity Partners Inc. was founded by Bradley N. Rotter, its chairman, in 1992. Alan B. Perper its president of Dignity Partners and John Ward Rotter is its executive vice president. The Echelon Group, parent company of Dignity Partners, was established in 1988 by Rotter.
Ironwood Capital Partners Ltd. is an investment banking firm which specializes in the structuring and placement of corporate debt securities. With a particular expertise in asset securitization, the principals of Ironwood Capital have successfully completed over $2 billion in private placements in the past eight years.
CONTACT: Ironwood Capital Partners Ltd.
Marc A. Relch, 203/244-0701
David Evans Katz, 203/244-0703
Carolyn C. Gallette,, 203/244-0705
David P. Olson., 203/244-0716
