The capacity underwriting process utilized within the overall INVIZEN real-time underwriting approach is endemic to the overall success of the capital market participants. The key issues that need to be understood include the following:
- The goal of the RTU approach is to position all business assets for qualification to participate in the RTS Investment Protection Program so as to maximize the opportunity of eliminating materially-significant risk exposure to term, maturity and default risks. This is one of the most important considerations, as many capital market participants seek to hold their securities for the shortest period of time possible before selling the securities into the secondary market, thus realizing their full profit-potential expectations for the transaction. To the extent that these capital market participants may believe that their opportunity to realize said securities sale may be, to one degree or another, compromised by the subject transaction at issue, this degrades the opportunity for the sponsor/issuer to have a successful outcome in obtaining capital, and may unintentionally remove potential capital market participants from the pool. Accordingly, the INVIZEN program focuses on creating the conditions precedent to realizing the outcome of maximizing that future sale opportunity and utilizes the RTU and RTS processes as the means for achieving this goal. If this goal can be achieved, then the resulting velocity of transactions may be increased, the odds of successful development financing procurement may be increased, and the odds of a successful investment outcome may be increased. This creates the potential for all participants to routinely realize their respective business goals, the sufficiency of which, are a requirement to the closing of any capital investment transaction.
- The RTU approach seeks to eliminate the propensity for creating asset bubbles that, to one extent or another, are the result of over-eager investment choices that, in turn, become more and more predicated upon subjective criteria that ends up allowing otherwise marginal transactions to become strong candidates for funding, and then actual funded transactions, as the appetite for investment in a given CRE vertical grows over time. The RTU approach therefore replaces the subjective credit scoring and related criteria used in the process with the findings of the collateral and capacity underwriting findings in order to create the final composite capacity underwriting outcome that drives all other underwriting element analyses.
- The underlying RTU empirical assumptions utilized in the production of the underwriting analysis are separate an apart from the material representations of fact made by the issuer, with only the results of the INVIZEN RTU analysis being compared to these material representations of fact, with the deviations noted for future discussion between the financial participants in the transaction. The empirical assumptions are sourced, by and large, from the findings of the component RTAF report created in each case that is separate and apart from any project feasibility study that is proffered by the issuer for the same purposes, as the INVIZEN RTU underwriting model approach requires fundamentally different processes and data outputs from those commonly provided by the feasibility consulting industry, in order to perfect its intended purpose.