Patent ID: 7593894
Filing Date: 2009-09-22
Classification: G06Q

Abstract:
1. A method implemented by a computer system for structuring a financial transaction, comprising: allocating, with the computer system, to a transaction pool a first credit having an obligation to make specified payments and a second credit having an obligation to make specified payments, each of the first credit and second credit being in a non-default state when a respective obligation is met and being in a default state when a respective obligation is not met; associating, with the computer system, a first senior holder and a first subordinate holder with the first credit using a) a respective first senior holder financial instrument through which payments from the first credit flow to the first senior holder and b) a respective first subordinate holder financial instrument through which payments from the first credit flow to the first subordinate holder; associating, with the computer system, a second senior holder and a second subordinate holder with the second credit using a) a respective second senior holder financial instrument through which payments from the second credit flow to the second senior holder and b) a respective second subordinate holder financial instrument through which payments from the second credit flow to the second subordinate holder; structuring the first senior holder financial instrument and the first subordinate holder financial instrument to give priority to payments due the first senior holder prior to payments due the first subordinate holder in the event the first credit enters the default state; using payments from the second subordinate holder financial instrument to perform the obligation of the first credit for the benefit of the first senior holder to the extent that the first credit enters the default state and payments due the first senior holder are not available; and providing the second subordinate holder the benefit of the obligation of the first credit to the extent that payments due the second subordinate holder were used to perform the obligation of the first credit; wherein both the first subordinate holder and the second subordinate holder are junior to the first senior holder but neither of the first senior holder nor the second senior holder are junior to one another; and wherein the amount of the first credit is limited to increase the likelihood that a payment default could be fully absorbed by the payments from the second subordinate holder financial instrument.