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BUSINESS |
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Specialty finance company founded in December 2006 with a focus on |
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. Providing premium financing for individual life insurance policies issued by insurance companies generally rated "A+" or better by Standard & Poor’s or "A" or better by A.M. Best Company and
. Purchasing structured settlements backed by annuities issued by insurance companies or their affiliates generally rated "A1" or better by Moody’s Investors Services or "A−" or better by Standard & Poor’s. |
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Premium finance |
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. Earns revenue from interest charged on loans, loan origination fees and fees from referring agents.
. Historically relied on debt financing to operate this business. Since 2007, the United States’ capital markets have experienced extensive distress and dislocation due to the global economic downturn and credit crisis.
. Lenders in the premium finance market generally exited the market or increased their lending rates and required more assurances such as additional collateral support and third-party guarantees. As a result, IFT’s financing cost for a premium finance transaction increased to 31% per annum of the principal balance for the nine months ended September 30, 2010, up from 14.5% for the twelve months ended December 31, 2007 |
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Use of IPO proceeds |
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With the IPO proceeds IFT intends to fund future premium finance transactions with equity financing instead of debt financing. Over time IFT expects to reduce its cost of financing. |
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Structured settlement business |
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In the structured settlement business IFT purchases structured settlements at a discounted rate and sell such assets to, or finance such assets with, third parties.
. For the nine months ended September 30, 2010 and the year ended December 31, 2009, IFT purchased structured settlements at weighted average discount rates of 19.3% and 16.3%, respectively.
. IFT plans to use a portion of the net IPO proceeds to purchase structured settlements and retain the amounts on its balance sheet |
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COMPETITION |
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Premium Finance |
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Principal competitors within the premium finance industry are CMS, Inc., Insurative Premium Finance Ltd. and Madison One as well as smaller, less well known companies. Life settlement companies that compete with IFT’s premium finance business by providing liquidity to policyholders through the sale of life insurance policies include Coventry First LLC, Life Partners Holdings, Inc. and ViaSource Funding Group, LLC. |
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Structured settlements |
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. IFT believes it is one of the larger acquirers of structured settlements in the United States
. Main competitors are J.G. Wentworth & Company, Inc., Peachtree Settlement Funding, Novation Capital LLC (a subsidiary of Encore Financial Services), Settlement Capital and Stone Street Capital. |
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EMPLOYEES : As of September 30, 2010 had 118 employees |
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USE OF PROCEEDS |
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$228.3 million from sale of 16.7mm shares |
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. $175.0 million to support premium finance transactions
. Up to $30.0 million of the net proceeds to support structured settlement activities
. Any remaining proceeds for general corporate purposes |
