Asset Counter Party Risk

The liquidity provided via Prestio is deployed against loans collateralized by real-world commercial assets. To reduce and manage the counterparty risk against the assets, liability assessment and legal and financial due diligence is carried out on each asset to validate the title, establish regulatory compliance of the ownership structure, and comply with relevant operational regulations. The outcome of legal, due diligence helps assess asset risk levels and the implementation of a rectification plan. In addition, we map the key-permission cycle to ensure that assets remain compliant during the warehousing period. As the second level of legal due diligence, we review all contracts that could be impacted by the proposed asset warehousing. We set a critical path to cancellation, tolling, or suspension of any affected contracts. The final component of legal due diligence identifies any contractual obligations in breach or under litigation and develops a cure strategy. Financial due diligence review the financial position of the target asset, review accounting practices and standards, and assess any residual or accumulated tax risks. Additionally, recommendations are made to optimize the capital structure of the asset, utilizing any losses that have been carried forward prior to expiration. Funds will be withheld for the liquidity facility and applied to liabilities as a condition of the release of funds to borrowers.