ALOC
Alternative Letter of Credit (ALOC) Facility
The ALOC Facility is designed for companies that operate in industries that are required to post significant collateral for their Casualty insurance programs, thereby reducing their credit capacity, impacting liquidity and working capital.
ALOC facility creates off-balance sheet credit capacity outside the traditional banking system. Companies pay a credit-based fee, and the Facility arranges for an LOC to be issued by an NAIC-approved bank as collateral for Casualty insurance policies. This releases existing collateral and restores revolver capacity/cash.
An efficient, off-balance sheet solution for companies to post collateral for Casualty and self-insurance programs.
The Process
The process is simple and straightforward and does not involve the underwriting of claims and losses or the posting of additional collateral. Private companies simply need to provide their most recent audited financial statements and a standard credit underwriting package. They pay a credit-based fee, and the ALOC Facility arranges for an LOC to be issued by an NAIC-approved Bank. Collateral, typically, may be replaced at any time and does not need to coincide with a policy renewal date.
Finally, a solution that enables companies to meet and exceed their capital goals through the unique convergence of insurance and financial capital markets.
ALOC is facilitated by two industry-leading experts, Vanbridge and GreensLedge, through a joint venture partnership, Convergence Point Solutions. To learn more, discuss your specific requirements or to start the application process, please visit convergencepointsolutions.com.