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.
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.
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
Intangible assets such as Intellectual Property
Industrial equipment including mining/drilling equipment, power assets, plant and
machinery & construction equipment
Commercial vessels and offshore assets
Rolling stock, trains, trams, buses and other transportation
Non-traditional assets, for example commercial lease portfolios, energy reserves
Financial assets, for example, illiquid bonds, thinly traded commodities