Debt Security Token Offering (STO) | REICG Debt Security Token Offering

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REICL Bond STO

REICL is disrupting the way “Private Equity” real estate funds can borrow money to leverage new acquisitions.

With this Debt STO, REICL can deliver a 5.5% coupon rate with a pay rate of 4.00% interest with a total yield of 6.4% providing income to global investors, paid quarterly in $U.S. Dollars (or their local currency of choice) and non-U.S. investors will be exempt from the 30% U.S. withholding tax requirements.

This new way is based on the combination of a “Corporate Bond” and a structured “Real Estate Credit Facility”, made possible by the “Portfolio Debt Exception” recorded on the blockchain as a “Security Token Offering (STO).”

The REICL Bond STO will provide the Debt financing for portfolio acquisitions and adhere to the following underwriting requirements. Adherence to Underwriting standards is essential to establishing confidence with bond investors.

REICL will maintain an average Loan to Value Ratio (LTV) of 65%. Where the “value” is the acquisition price. An LTV ratio is calculated by dividing the amount borrowed by the lesser of the appraised value or purchase price of the property, expressed as a percentage. The balance of the capital required for acquisitions will be from Equity Investors. For commercial real estate the financial institutional standard is 75% or less.

REICL will maintain an average Debt Service Coverage ratio (DSCR) of 1.75x. The DSCR is a measurement of the cash flow available to pay current debt obligations. The ratio states net operating income as a multiple of debt obligations due within one year, including interest and principal. For commercial real estate the financial institutional minimum standard is between 1.15x and 1.5x
REICL will obtain an appraisal from a nationally recognized appraisal firm (i.e. CBRE) prior to closing on any acquisition and will not pay a price above the appraised value.

No U.S. commercial real estate firm has ever offered an International Bond like this before.

Token Sale

Token Details

Total Raise	$50,000,000	Token Name	TBD
Soft Cap	$0	Token Symbol	REICL – D
Raise Status	Coming Soon	Token Price	$1,000.00 US
Minimum Investment	$1,000 US	Blockchain Platform	Tezos
Security Type	Debt / with 5.5% coupon & 4.0% Pay Rate	Protocol	ERC-20 ERC-884
Exemptions	Reg A+ & Reg S	Issuance Platform	Vertalo
Registration Country	USA	Restrictions	KYC / AML Whitelist
Accepted Currencies	USD, BTC, ETH	Escrow Custodian	TBD

Accepted Investors	US – Investors Global – Sophisticated Investors
Minimum Required Holding Period	18 Months

The message we want to convey is that: The Sponsor of this Fund will NOT receive any upfront fees out of the money borrowed from this bond issuance. The Sponsor will only receive a Bond Servicing Fee of 0.50% of loans originated.

* Please Note: The exact proportion of the money borrowed that will be needed for “Cost of Funds” including Legal Fees, is not known at this time. Cost of Funds may include, some Broker Dealer fees, Exchange fees, technology partner setup fees, etc. Regardless of the fees, Bond investors will receive the full 4.0% pay rate on the total amount invested.

Company Structure

The Company has used the beneficial advantages of forming as a Delaware Limited Liability Corporation (LLC).

An LLC allows for greater flexibility structuring the entity in defining ownership and bondholder rights and keeps costs at a minimum.

This overall structure creates an attractive new type of Real Estate investment offering and differentiates us from all other Real Estate companies on the market.

Currently, most public real estate offerings are in the form of a Real Estate Investment Trust (REIT), in order to avoid double taxation. A REIT is required to distribute 90% of it’s profits in the form of dividends which, for federal purposes, are generally taxed at the investor’s personal income tax rate, which can be as high as 37%.

Tax Law Advantages

Because of a relatively obscure IRS exemption called the “Portfolio Debt Exception”, portfolio interest is entirely exempt from the 30 percent U.S. withholding tax. To qualify as portfolio interest, the loan must be from a foreign lender and must meet several requirements. The main requirement as it pertains to a Debt STO is that the debt must be in “Registered Form”. Meaning, the original and subsequent beneficial owners must be recorded in book-entry form. This requirement is solved perfectly with STO blockchain technology.

REICL Bond STO

This new way is based on the combination of a “Corporate Bond” and a structured “Real Estate Credit Facility”, made possible by the “Portfolio Debt Exception” recorded on the blockchain as a “Security Token Offering (STO).”

Company Structure

Tax Law Advantages

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