Secondary Market Annuities In Corporate Finance

The secondary market for annuities is traditionally the secret domain of large corporations. With annual distribution of around $700 million it is one of the smaller financial offerings available. A recent press release offers a glimpse of how financial institutions use these secondary deals to profit using companies like for support. The other major benefit of a very bad loans with loans4u, is that the lender may report the borrower’s payment history to credit reporting agencies. This may help the borrower build a better credit rating when payments are made on time. Loan shoppers should confirm a lender reports to credit bureaus in order to ensure they enjoy this benefit.

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This press release talks about how J.G. Wentworth, one of the biggest players in the industry, just completed a securitization of $265 Million of structured settlements. Wentworth buys various financial instruments like settlements, annuities, and financial obligations through aggressive direct-to-consumer advertising, offering cash now for future payments. You may have heard their catchy radio and TV advertising. 
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J.G. Wentworth buys these contracts, packages them into a fixed income portfolio, and resells them to institutional investors. Of course, they pocket the the spread and make a good business out of doing it. Read the release here.
The key to this is that factoring companies like J.G. Wentworth create high-quality fixed income portfolios that are in high demand from banks, corporations… and insurance companies. An insurance company can conceivably buy a securitized portfolio which may in part be comprised of its own obligations! 
In this we can see the essence of Share Prices – they are such ultra safe and secure financial instruments that they are in demand by the most stable and risk averse institutions. Secondary market annuities thus may indirectly contribute to the safety and yield of primary market annuities.

Ultra Safe, Guaranteed Cash Flows:

Wentworth does on an institutional scale exactly as we recommend to our clients: they assemble many Secondary Market Annuities to create a desired stream of cash flow, but one that is of higher yield than what is available on the open market. Bundled together, these financial instruments become smooth payment streams.   Wentworth’s buyers have the same goals as you: they want ultra-safe, guaranteed returns to add stability to their investment portfolio.

Stefano Sola, J.G. Wentworth Chief Investment Officer phrases it like this:

“The driver behind this decision was the underlying investor appetite and demand for long term access to strong, consistent and predictable cash flows”

Does this sound familiar? Frequent readers of this site will realize that’s exactly the benefit I’ve emphasized all along. A strong, consistent, and predictable cash flow is precisely what individual investors should seek for guaranteed retirement income. Do you believe me yet? 
Consider this: Would you like to get a 3.5% fixed annuity from a company like MetLife whose assets may include this securitized portfolio from J.G. Wentworth, or would you rather get the SAME QUALITY UNDERLYING ASSET yielding 6.5% from me? Seems like an easy decision.

This Market Is Open To You…For A Limited Time:

As you may be aware, I have access to excellent Secondary Market Annuities for individuals.  Though they are available to individual consumers currently, this has not traditionally been the case, nor may this market stay open to individuals for long. While this limited opportunity is available I suggest you take a closer look before the demand from banks comes back, and J.G. Wentworth and others absorb all available inventory and shut off the valve for good.
All the details of these transactions are available for your due diligence before entering the market. Once you reserve a specific contract you can investigate all the underlying facts and make your own independent verification. Take advantage of this excellent opportunity while you can.
This is an exceptional opportunity to increase the yield substantially on the safe portion of your portfolio. Take the opportunity now to get on the institutional side of a financial transaction for a change!
Have a great week!
Bryan J. Anderson

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Bryan Anderson

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