Financial Times Features Adam Tepper on M∙CAM’s Intangible Asset-based Tier 1 Bank Capital Structures
CHARLOTTESVILLE, VA- Adam Tepper, Head of Corporate Development at M∙CAM, was featured in the Financial Times article written by Brooke Masters, "Banks Eye Intangible Assets As Collateral".
Several US banks want to tap the value of the intellectual property holdings of their borrowers as a way of trimming their capital requirements, which are to be made tougher under Basel III rules.
Under the terms of many loans, banks have the right to seize a borrower’s patents and trademarks as part of a foreclosure proceeding. But these intangible assets cannot generally be counted towards the loan’s security for regulatory capital assets because they are considered too difficult to value.
Now some banks – faced with tougher safety rules that begin to take effect in January – are exploring whether they can use the assets to reduce their estimates of expected losses in case of a default, in turn reducing the risk weight of the loan and overall capital requirements.
“There is now awareness that these types of assets are fungible and transferable,” said Adam Tepper, global head of corporate development at M.Cam, a US finance company that is working on a couple of proposed structures involving intellectual property.
“We’re giving the insurance companies a pathway to provide new capital to banks,” he said.
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