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Meridian’s typical offering structure relies on the exemption from registration requirements of the Securities Act of 1933 contained in §4(2) of the Act as interpreted by Rule 506 incorporated in Regulation D of the General Rules and Regulations, and upon similar exemptions contained in the various blue sky laws of appropriate states. Under this structure, accredited individuals and/or institutional investors bring cash capital and are admitted as Noteholders – each issued a fixed term, fixed yield promissory note secured by an undivided interest in the collective assets (mortgages and cash) of a newly-formed, bankruptcy remote issuing entity (typically a newly-formed limited liability company). Depending upon the issuer’s desires and/or the investor’s demands, mortgage assets and investor cash can either be held by the issuing entity subject to an intercreditor agreement or, alternatively, can be held by Meridian as custodian FBO the investors. Further, deals can be structured to allow for the payment of placement fees to NASD registered broker dealers or, conversely, can (where and when appropriate) be structured to comply with applicable Officer of the Issuer exemptions. |
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