CECs: Bank Loan Origination with a Premium Yield
CECs are Patent Pending Loan Participations Documented by the CEC-X Master Loan Participation Agreement that Delivers a New Cost-Efficient and Scalable Proprietary Source of Better Private Credit Origination.
Some key numbers to highlight
>100 bps
CEC Premium
$0
Cost of CECs for Investors
$ Billions
Scalable Market for CECs
CEC structures harness regulatory change, bank capital limits, and private credit’s available capital to establish a new institutional asset class: Cash-Collateralized CEC Loan Participations.
This asset class features a defensible moat, high scalability, and alignment with insurance and banking regulatory frameworks.
HOW CAN CEC LOAN PARTICIPATIONS HELP YOUR LOAN ORIGINATION?
Key CEC Benefits for Private Credit Investors
01
Higher Yield
CECs are senior secured with the same covenants and collateral as the bank and with enhanced resolution rights unique to CECs, but also feature premiums that are, generally, > 100 bps over the underlying loan interest rate, equivalent to yields of SOFR + 300 - 600+ bps
02
Ideal for Insurance Mandates
CECs are treated under GAAP or statutory accounting as loan participations with "1st to be Paid Priority Cash Flows", and for insurers managing reinvestment risk in higher-rate environments, underlying loans are typically floating-rate, amortizing, and with maturities of 3 – 7 years
03
Deployment at Scale
Proprietary exposure to billions in bank loans otherwise locked in bank portfolios — means investors can deploy capital quickly — crucial for keeping dry powder from sitting idle (a major drag on fund returns), while matching asset inflows with loan originations more efficiently to reduce the need to chase riskier assets to stay invested
04
Competitive Advantage
Exclusive CEC sourcing opportunities with trusted banking partners delivers consistent and scalable private credit origination —generally focused on IG rated exposures — and enhances a CEC investor's competitive sourcing in a market where deal flow is the ultimate bottleneck