Patent ID: 7310616

Claim:
A method for structuring a transaction carried out among a first party, a second party, and a third party, comprising: arranging a first agreement between the first party and the second party, wherein the first agreement: i) obligates the first party to sell a security to the third party; ii) obligates the second party to pay a first in-lieu-of dividend to the first party; iii) requires the first periodic marking of the security sold by the first party to market; and iv) obligates the first party to unwind the sale of the security to the third party; arranging a second agreement between the second party and the third party, wherein the second agreement: i) obligates the third party to buy the security sold by the first party; ii) obligates the third party to pay a second in-lieu-of dividend to the second party; iii) requires the second periodic marking of the security sold by the first party to market; and iv) obligates the third party to unwind the sale of the security made by the first party; selling the security by the first party to the third party under the obligation of the first agreement; paying the first in-lieu-of dividend by the second party to the first party under the obligation of the first agreement; carrying out the first periodic marking of the security sold by the first party under the requirement of the first agreement; carrying out by the first party the unwinding of the sale of the security under the obligation of the first agreement; buying the security by the third party under the obligation of the second agreement; paying the second in-lieu-of dividend by the third party to the second party under the obligation of the second agreement; carrying out the second periodic marking of the security sold by the first party under the requirement of the second agreement; and carrying out by the third party the unwinding of the sale of the security under the obligation of the second agreement; wherein short exposure to the security is provided to the third party based upon the sale of the security by the first party.