RESIDUAL VALUE INSURANCE
Residual Value Insurance (RVI) helps companies to manage their asset value risk by guaranteeing that a properly managed asset will have an agreed value at a future date.
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Typically RVI is used in lease and financing structures where there is a risk that the value of the asset will be less than the final payment but it can also offer benefits relating to accounting treatment, capital optimisation and cashflow improvement.
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RVI can 'harden' asset values to make them suitable for use as collateral on debt financings when lenders may otherwise be unwilling to loan at a reasonable LTV on those assets.
Applications for RVI include:
Commercial real estate
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Intangible assets such as Intellectual Property
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Industrial equipment including mining/drilling equipment, power assets, plant and
machinery & construction equipment
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Commercial vessels and offshore assets
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Rolling stock, trains, trams, buses and other transportation
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Non-traditional assets, for example commercial lease portfolios, energy reserves
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Financial assets, for example, illiquid bonds, thinly traded commodities
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