Patent ID: 7266524
Filing Date: 2007-09-04
Classification: G06Q

Abstract:
1. A method implemented by a programmed computer system for isolating risk in a financial transaction, comprising: utilizing the programmed computer system to store data relating to the allocation, to a transaction pool, of 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; utilizing the programmed computer system to store data relating to the association of 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; utilizing the programmed computer system to store data relating to the association of 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; utilizing the programmed computer system to store data relating to the structuring of 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; utilizing the programmed computer system to facilitate the making of payments obligated by 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 utilizing the programmed computer system to facilitate the provision to 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 and to the extent that any benefit remains in the obligation of the first credit to the first senior holder.