(1888PressRelease)
August 07, 2008 - Vancouver, BC: Pursuant to the ongoing turmoil and confusion governing the depth of the crisis inside the US real estate market, Quote Platform Syndicate Inc. (“QP”) is now pricing hedge contracts for commercial and residential property-based corporations involved in urban projects. The hedge contracts allow developers to offset the risk of adverse movements in post-project-completion selling prices for condominium units; the hedges can be obtained via a put option or via an insurance coverage on a pre-agreed floor (selling) price.
Initial deals for high quality residential condominiums in San Diego and San Francisco, for example, have been priced at 3% per annum with a floor price determined at a level 10% lower than the last public transaction prices in similar developments. The put option or insurance is generally available over an 18 month period.
Like for any buyer of options, the developer can simply walk away from the transaction by foregoing the premium paid, in the event that the real estate market trends higher in forthcoming months.
QP is part of an international group of risk buying syndicates located in centres (like Mumbai, Singapore and the Middle East) where the process of wealth creation has reached unprecedented heights in recent months. QP’s principals have an extensive record of pricing derivates and insurance transactions in numerous emerging markets.
Since QP’s offering of US property risk contracts is premised on the appetites and perceptions of risk syndicates canvassed on a deal-by-basis, the pricing of options and insurance is directly related to the type of credit quality property developers want to accept; sub-investment-grade syndicates will naturally offer better rates and floors than their investment grade counterparts.
More updates on prices and on concluded transactions will be posted on QP’s website on an ongoing basis. For more information, contact:
Director, Risk Pricing
Quote Platform Syndicate Inc.
3080 River Road
Richmond BC V7C 5N2 Canada
www.quoteplatform.com
www.uniqueanalysis.org
Email: derivatives ( @ ) shaw dot ca & crossborderreports ( @ ) shaw dot ca
Fax: 1-604-270-6948
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