by John Darer® CLU ChFC MSSC RSP
Financial reporters who skip their homework are like fish in a barrel! Case in point: the well-earned takedown and final "IxNay" of DealFlow Media's Structured Settlements Report. Cue the entrance of Markets Media, LLC.
This is what Markets Media's Steve Marlin says:
Since 1998, aggregate term issuance of structured settlement securitizations has surpassed $2.4 billion, and the sector continues to grow as more market players take greater notice of off-the-run assets. “These transactions benefit from uncomplicated deal structures, stable assets, and a relatively easy underwriting process,” said Dolan.
With more than $80 billion face value of structured settlements in existence, this sector of the securitization market has even more room to grow".
That pretty much wraps up Steve Marlin’s groundbreaking quest to solve life's mysteries—well, at least the ones involving coffee stains and cat videos.
To be more specific…
A. Definition of Face Value
The nominal, or stated, amount of security. The face value of a bond is the amount the issuer agrees to pay upon maturity. Reporters who don't do their research confuse face value with present value.
B. The "Sound of Philadelphia" (well..near by)
From the May 7, 2009 a Bankruptcy Code section 1125 Disclosure Statement was issued as part of the Prepetition Solicitation of Votes With respect to the Prepackaged Plan of Reorganization of JGW Holdco, LLC, J.G. Wentworth, LLC and J.G. Wentworth, Inc. JG Wentworth Bankruptcy disclosure submitted under penalty of perjury:
- Cites NSSTA statistics of over $100B in premiums for structured settlements issued in the United States from 1979 through 2007.
- States that JG Wentworth has completed 51,000 guaranteed and life contingent structured settlement transactions since 1995, with aggregate payment streams (as opposed to premiums) of approximately $3.9B.
C. The IRS Factoring Audit Technique Guide
"The following background information is excerpted (with permission) from an article that appeared in the ABA Judges’ Journal, Spring 2005 Vol. 44, No. 2 pp. 19-31, “Transfers of Structured Settlement Payment Rights: What Judges Should Know About Structured Settlement Protection Acts”, authored by Daniel W. Hindert and Craig H. Ulman. Structured settlements have enjoyed widespread acceptance and have become an established part of our legal landscape over the past twenty-five years. More than $6 billion is now paid each year to fund new structured settlements in the United States, and an estimated $100 billion or more has been paid in the aggregate TO FUND structured settlements that are in force today".
The structured settlement factoring market feels huge, but that’s probably just because their ads are as omnipresent and irritating as mosquitoes in summer.
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