Method and apparatus for conducting a transaction

• US 20050033674A1
• Filed: 01/27/2004
• Published: 02/10/2005
• Est. Priority Date: 08/05/2003
• Status: Active Grant

• Current Assignee: Goldman Sachs & Co. LLC (Goldman Sachs Group Incorporated)
• Original Assignee: Goldman Sachs & Company (Goldman Sachs Group Incorporated)
• Inventors: Jones, Emerson P., Schoen, Karen
• Granted Patent: US 7,747,488 B2
• 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

Systems, methods, apparatus, computer program code and means for conducting a transaction are provided. In some embodiments, a unit is issued to a holder including a forward contract and a note, in which the note specifies an initial capped remarketing, at least a first subsequent capped remarketing, and an uncapped remarketing, the uncapped remarketing performed only if each of the capped remarketings fail.

Claims

1. A method for issuing a unit to a holder, comprising:

creating a forward contract, the forward contract specifying a settlement amount and a settlement date;

creating a note securing obligations of said holder under said forward contract, said note specifying an initial capped remarketing, at least a first subsequent capped remarketing, and an uncapped remarketing, said uncapped remarketing performed only if each of said capped remarketings fail, each of said capped and uncapped remarketings scheduled to occur prior to said settlement date; and

issuing said forward contract and said note as a unit.

2. The method of claim 1, wherein said note further specifies an opportunistic remarketing period during which an issuer of said unit has discretion to perform at least one of a capped and an uncapped remarketing.

3. The method of claim 1, further comprising a second and a third subsequent capped remarketing.

4. The method of claim 1, wherein a remarketing is successful if said note can be resold for an amount greater than said settlement amount.

5. The method of claim 1, wherein a remarketing is successful if said note can be resold for an amount greater than said settlement amount plus a remarketing fee.

6. The method of claim 1, wherein an issuer of said unit is a financial institution obligated to maintain Tier 1 and Tier 2 capital and wherein said unit is treated as Tier 1 capital.

7. A method for remarketing a mandatory unit:

attempting an initial capped remarketing of a note portion of said mandatory unit, said initial remarketing attempted prior to a settlement date of a forward contract portion of said mandatory unit, said initial remarketing subject to a reset rate cap;

attempting a subsequent capped remarketing if said initial remarketing is unsuccessful; and

attempting, if both said initial capped remarketing and said subsequent capped remarketings are unsuccessful, a final remarketing of said note portion of said mandatory unit, said final remarketing attempted prior to said settlement date and not subject to a reset rate cap.

8. The method of claim 7, further comprising:

attempting, prior to said attempting said final remarketing, an opportunistic remarketing, said opportunistic remarketing performed at an option of an issuer of said mandatory unit.

9. The method of claim 8, wherein said opportunistic remarketing is at least one of a capped and an uncapped remarketing.

10. The method of claim 7, further comprising:

settling said forward contract portion of said mandatory unit with proceeds from a successful remarketing.

11. The method of claim 7, wherein a remarketing is successful if said note can be resold for an amount greater than a settlement price associated with said forward contract.

12. The method of claim 7, wherein a remarketing is successful if said note can be resold for an amount greater than a settlement price associated with said forward contract plus a remarketing fee.

13. The method of claim 7, wherein said initial remarketing is scheduled to occur prior to said settlement date.

14. The method of claim 13, wherein both said subsequent capped remarketing and said final remarketing are scheduled to occur prior to said settlement date and after said initial remarketing.

15. The method of claim 7, wherein if said subsequent capped remarketing is unsuccessful, a second and a third subsequent capped remarketing are attempted.

16. The method of claim 7, further comprising:

determining that each of said attempted remarketings is unsuccessful; and

settling said forward contract portion of said mandatory unit with a seizure of collateral of a holder of said forward contract.

17. A method for issuing a mandatory unit from an issuer to a holder, the method comprising:

creating a forward contract, the forward contract having a contract term extending from an issue date of said unit to a settlement date, said forward contract specifying a share delivery ratio for calculating a share delivery of issuer stock to said holder at said settlement date in exchange for a settlement amount;

creating a note securing obligations of said holder under said forward contract, said note specifying an initial capped remarketing, at least a first subsequent capped remarketing, an opportunistic remarketing period, and an uncapped remarketing, said uncapped remarketing performed only if each of said capped remarketings and any remarketings attempted during said opportunistic remarketing period fail; and

issuing said forward contract and said note as a unit.

18. The method of claim 17, wherein said note is a contingent note.

19. A unit administration system, comprising:

a processor; and

a storage device in communication with said processor and storing instructions adapted to be executed by said processor to;

administer an attempt of an initial capped remarketing of a note portion of said mandatory unit, said initial remarketing attempted prior to a settlement date of a forward contract portion of said mandatory unit, said initial remarketing subject to a reset rate cap;

administer an attempt of a subsequent capped remarketing if said initial remarketing is unsuccessful; and

administer an attempt, if both said initial capped remarketing and said subsequent capped remarketings are unsuccessful, a final remarketing of said note portion of said mandatory unit, said final remarketing attempted prior to said settlement date and not subject to a reset rate cap.

20. The unit administration system of claim 20, further comprising a communication device coupled to receive information from at least one of an issuer, a holder, a remarketing agent, and a market data source.

21. A method for remarketing a mandatory unit:

(a) attempting an initial capped remarketing of a note portion of said mandatory unit, said initial remarketing attempted prior to a settlement date of a forward contract portion of said mandatory unit, said initial remarketing subject to a reset rate cap;

(b) attempting a subsequent capped remarketing if said initial remarketing is unsuccessful; and

(c) attempting, if both said initial capped remarketing and said subsequent capped remarketings are unsuccessful, a final remarketing of said note portion of said mandatory unit, said final remarketing attempted prior to said settlement date and not subject to a reset rate cap;

wherein at least some of said (a)-(c) are performed using a computer.