Methods for performing data processing operations associated with securities and security structures

• US 20040039669A1
• Filed: 05/19/2003
• Published: 02/26/2004
• Est. Priority Date: 05/17/2002
• Status: Abandoned Application

• Current Assignee: Goldman Sachs & Co. LLC (Goldman Sachs Group Incorporated)
• Original Assignee: Goldman Sachs & Co. LLC (Goldman Sachs Group Incorporated)
• Inventors: Todd, Joseph, Jones, Emerson P., Schoen, Karen
• Application Number:
  US10/440,831
• Publication Number:
  US 20040039669A1
• Time in Patent Office: Days
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

One embodiment of the present invention relates to a computer implementable method for performing data processing operations associated with a security issued by an issuer, which method comprises the steps of: coupling a debt of the issuer and a warrant; structuring the warrant with the requirement to purchase a fixed number of shares of stock of the issuer; allocating proceeds from issuance of the security essentially entirely to the debt and storing data representative of the allocated proceeds; and tracking a payment status of a plurality of installment payments due on the warrant and storing data representative of the payment status so that the installment payments may be applied to the warrant; wherein each of the installment payments is distinct from the proceeds associated with the issuance of the security. Another embodiment of the present invention relates to a security issued by an issuer, comprising: a debt of the issuer; and a warrant, which warrant has associated therewith a right to purchase a fixed number of shares of stock of the issuer; wherein proceeds from issuance of the security are allocated essentially entirely to the debt; and wherein the warrant is paid for by at least one payment distinct from the proceeds associated with the issuance of the security.

Claims

1. A computer implementable method for performing data processing operations associated with a security issued by an issuer comprises the steps of:

coupling a debt of the issuer and a warrant;

structuring the warrant with the requirement to purchase a fixed number of shares of stock of the issuer;

allocating proceeds from issuance of the security essentially entirely to the debt and storing data representative of the allocated proceeds; and

tracking a payment status of a plurality of installment payments due on the warrant and storing data representative of the payment status so that the installment payments may be applied to the warrant;

wherein each of the installment payments is distinct from the proceeds associated with the issuance of the security.

2. The method of claim 1, further comprising recording data identifying a holder of the debt and recording data identifying a holder of the warrant.

3. The method of claim 2, wherein the holder of the debt and the holder of the warrant are selected from the group of:

(a) a single entity; and

(b) a first entity and a second entity, wherein the second entity is distinct from the first entity and wherein the first entity holds the debt and the second entity holds the warrant.

4. The method of claim 3, further comprising determining a value associated with one of:

(a) a fixed-rate coupon paid by the debt; and

(b) a floating-rate coupon paid by the debt.

5. The method of claim 4, wherein the coupon is a cash coupon.

6. The method of claim 5, wherein the coupon is payable periodically.

7. The method of claim 6, wherein the coupon is payable at a period selected from the group of:

(a) daily;

(b) weekly;

(c) monthly;

(d) quarterly;

(e) semi-annually; and

(f) annually.

8. The method of claim 7, wherein the warrant is paid for by periodic installment payments made at a period selected from the group of:

(a) daily;

(b) weekly;

(c) monthly;

(d) quarterly;

(e) semi-annually; and

(f) annually.

9. The method of claim 8, wherein the coupon and each of the periodic installment payments for the warrant are paid on the same periodic cycle.

10. The method of claim 9, wherein the coupon and each of the periodic installment payments for the warrant are paid at essentially the same time.

11. The method of claim 1, wherein the steps are carried out in the order recited.

12. A computer implementable method for performing data processing operations associated with a security issued by an issuer, which issuer is a publicly traded corporation, wherein the method comprises the steps of:

coupling a debt of the issuer and a warrant;

structuring the warrant with the requirement to purchase a fixed number of shares of stock of the issuer;

recording data identifying a holder of the debt and recording data identifying a holder of the warrant, wherein the holder of the debt and the holder of the warrant are selected from the group of;

(a) a single entity; and

(b) a first entity and a second entity, wherein the second entity is distinct from the first entity and wherein the first entity holds the debt and the second entity holds the warrant;

recording data identifying a maturity associated with the debt;

recording data identifying a face value associated with the debt when the security is issued;

recording data identifying an expiration time associated with the warrant;

allocating proceeds from issuance of the security essentially entirely to the debt and storing data representative of the allocated proceeds;

tracking a payment status of a plurality of periodic installment payments due from the warrant holder on the warrant and storing data representative of the payment status so that the installment payments may be applied to the warrant; and

determining a value associated with one of;

(a) a fixed-rate cash coupon paid by the debt; and

(b) a floating-rate cash coupon paid by the debt, wherein the coupon and each periodic installment payment are payable at a period selected from the group of;

(a) daily;

(b) weekly;

(c) monthly;

(d) quarterly;

(e) semi-annually; and

(f) annually, and wherein the coupon and each of the periodic installment payments for the warrant are paid at essentially the same time;

wherein each of the installment payments associated with the warrant is distinct from the proceeds associated with the issuance of the security;

wherein the security obligates the issuer to cause remarketing of the debt by the expiration time of the warrant; and

wherein collateral is used to support the periodic installment payments associated with the warrant.

13. The method of claim 12, wherein the security obligates the issuer to cause remarketing of the debt upon the occurrence of a required acceleration event, which required acceleration event comprises a market value of the security being below a target value.

14. The method of claim 13, wherein the required acceleration event comprises a market value of the security being below x percent of the value of the shares of stock of the issuer underlying the security, wherein x is less than 100.

15. The method of claim 14, wherein the required acceleration event comprises a market value of the security being below x percent of the value of the shares of stock for y number of trading days, wherein y is greater than zero.

16. The method of claim 15, wherein the security further provides the issuer the option to cause a voluntary acceleration event, which voluntary acceleration event causes the warrant to expire before the expiration time of the warrant.

17. The method of claim 16, wherein the holder of the warrant has a right to cancel the warrant.

18. The method of claim 17, wherein the holder of the warrant has a right to cancel the warrant at one or more predetermined times before the expiration of the warrant.

19. The method of claim 18, wherein the warrant permits the holder of the warrant to purchase, at a price substantially equal to the face value of the debt, a fixed number of shares of common stock of the issuer.

20. The method of claim 12, wherein the security further provides the issuer the option to cause a voluntary acceleration event, which voluntary acceleration event causes the warrant to expire before the expiration time of the warrant.

21. The method of claim 12, wherein the holder of the warrant has a right to cancel the warrant.

22. The method of claim 21, wherein the holder of the warrant has a right to cancel the warrant at one or more predetermined times before the expiration of the warrant.

23. The method of claim 12, wherein the warrant permits the holder of the warrant to purchase, at a price substantially equal to the face value of the debt, a fixed number of shares of common stock of the issuer.

24. The method of claim 12, wherein the collateral comprises coupon payments on the debt.

25. The method of claim 24, wherein additional collateral is used to support the periodic installment payments associated with the warrant.

26. The method of claim 12, wherein the debt is puttable by the holder of the debt for essentially the face value of the debt.

27. The method of claim 26, wherein the right to put the debt occurs in the event of a failed remarketing of the debt.

28. The method of claim 26, wherein the right to put the debt occurs at one or more predetermined times before the maturity of the debt.

29. The method of claim 12, wherein the steps are carried out in the order recited.

30. A security issued by an issuer, comprising:

a debt of the issuer; and

a warrant, which warrant has associated therewith a right to purchase a fixed number of shares of stock of the issuer;

wherein proceeds from issuance of the security are allocated essentially entirely to the debt; and

wherein the warrant is paid for by at least one payment distinct from the proceeds associated with the issuance of the security.

31. The security of claim 30, wherein the warrant is paid for by a plurality of installment payments, each of which installment payments is distinct from the proceeds associated with the issuance of the security.

32. The security of claim 31, wherein the plurality of installment payments are paid periodically.

33. The security of claim 32, wherein the debt is held by a holder and the warrant is held by a holder.

34. The security of claim 33, wherein the holder of the debt and the holder of the warrant are selected from the group of:

(a) a single entity; and

(b) a first entity and a second entity, wherein the second entity is distinct from the first entity and wherein the first entity holds the debt and the second entity holds the warrant.

35. The security of claim 34, wherein the debt pays one of:

(a) a fixed-rate coupon; and

(b) a floating-rate coupon.

36. The security of claim 35, wherein the coupon is a cash coupon.

37. The security of claim 36, wherein the coupon is payable periodically.

38. The security of claim 37, wherein the coupon is payable at a period selected from the group of:

(a) daily;

(b) weekly;

(c) monthly;

(d) quarterly;

(e) semi-annually; and

(f) annually.

39. The security of claim 38, wherein the warrant is paid for by periodic installment payments made at a period selected from the group of:

(a) daily;

(b) weekly;

(c) monthly;

(d) quarterly;

(e) semi-annually; and

(f) annually.

40. The security of claim 39, wherein the coupon and each of the periodic installment payments for the warrant are paid on the same periodic cycle.

41. The security of claim 40, wherein the coupon and each of the periodic installment payments for the warrant are paid at essentially the same time.

42. A security issued by an issuer, which issuer is a publicly traded corporation, comprising:

a debt of the issuer; and

a warrant, which warrant has associated therewith a right to purchase a fixed number of shares of common stock of the issuer;

wherein the debt is held by a holder and the warrant is held by a holder;

wherein the holder of the debt and the holder of the warrant are selected from the group of;

(a) a single entity; and

(b) a first entity and a second entity, wherein the second entity is distinct from the first entity and wherein the first entity holds the debt and the second entity holds the warrant;

wherein proceeds from issuance of the security are allocated essentially entirely to the debt;

wherein the holder of the warrant pays for the warrant by a plurality of periodic installment payments, each of which installment payments is distinct from the proceeds associated with the issuance of the security;

wherein the debt has associated therewith a maturity;

wherein the debt has associated therewith a face value when the security is issued;

wherein the warrant has associated therewith an expiration time;

wherein the debt pays one of;

(a) a fixed-rate cash coupon; and

(b) a floating-rate cash coupon;

wherein the coupon and each periodic installment payment are payable periodically at a period selected from the group of;

(a) daily;

(b) weekly;

(c) monthly;

(d) quarterly;

(e) semi-annually; and

(f) annually;

wherein the coupon and each of the periodic installment payments for the warrant are paid at essentially the same time;

wherein the security obligates the issuer to cause remarketing of the debt by the expiration time of the warrant; and

wherein collateral is used to support the periodic installment payments associated with the warrant.

43. The security of claim 42, wherein the security obligates the issuer to cause remarketing of the debt upon the occurrence of a required acceleration event, which required acceleration event comprises a market value of the security being below a target value.

44. The security of claim 43, wherein the required acceleration event comprises a market value of the security being below x percent of the value of the shares of stock of the issuer underlying the security, wherein x is less than 100.

45. The security of claim 44, wherein the required acceleration event comprises a market value of the security being below x percent of the value of the shares of stock for y number of trading days, wherein y is greater than zero.

46. The security of claim 45, wherein the security further provides the issuer the option to cause a voluntary acceleration event, which voluntary acceleration event causes the warrant to expire before the expiration time of the warrant.

47. The security of claim 46, wherein the holder of the warrant has a right to cancel the warrant.

48. The security of claim 47, wherein the holder of the warrant has a right to cancel the warrant at one or more predetermined times before the expiration of the warrant.

49. The security of claim 48, wherein the warrant permits the holder of the warrant to purchase, at a price substantially equal to the face value of the debt, a fixed number of shares of common stock of the issuer.

50. The security of claim 42, wherein the security further provides the issuer the option to cause a voluntary acceleration event, which voluntary acceleration event causes the warrant to expire before the expiration time of the warrant.

51. The security of claim 42, wherein the holder of the warrant has a right to cancel the warrant.

52. The security of claim 51, wherein the holder of the warrant has a right to cancel the warrant at one or more predetermined times before the expiration of the warrant.

53. The security of claim 42, wherein the warrant permits the holder of the warrant to purchase, at a price substantially equal to the face value of the debt, a fixed number of shares of common stock of the issuer.

54. The security of claim 42, wherein the collateral comprises coupon payments on the debt.

55. The security of claim 54, wherein additional collateral is used to support the periodic installment payments associated with the warrant.

56. The security of claim 42, wherein the debt is puttable by the holder of the debt for essentially the face value of the debt.

57. The security of claim 56, wherein the right to put the debt occurs in the event of a failed remarketing of the debt.

58. The security of claim 56, wherein the right to put the debt occurs at one or more predetermined times before the maturity of the debt.