Clark Consulting, formerly Clark/Bardes, is prepping its second future flow insurance broker commission financing, a sequel to a $305 million first-of-its kind transaction last year, via Bear Stearns and Banc One Capital Markets.
The firm is staying with the Dallas-based deal team at Banc One to lead the pending three-part, $50 million transaction, which Moody's Investors Service rates at Aaa'/'A2'/ 'Baa2', based on en- hancement levels and Moody's assessment of the external risks.
After Clark/Bardes' fall 2002 transaction, which allowed the Illinois-based company to acquire Long Miller & Associates, Clark sealed its grip as the largest broker of bank-owned life insurance (BOLI).
The future flow deal - a rarity in itself for the U.S. market - monetizes the rights to current and future commission payments from a group of insurance carriers tied to the sale of BOLIs. According to Moody's, the commission payments are a function of mortality, earning on the cash surrender value of the policies, and the probability that the policies will remain in force and/or exchanged for other policies. The Clark pool consists over more than 20,000, a number that "limits the likelihood of deviations from historical mortality experience," Moody's said.
Interestingly, just last week The Wall Street Journal featured a story on BOLI and corporate-owned life insurance (COLI), which hyped up the decline in revenue in the product tied to the legislative risks, among other things.