Bank Cash Deposit Program

American Medical Capital, LLC, (AMC) is offering a unique mechanism for significantly and quickly increasing bank deposits.  This is a confidential program and can be transparent in financial disclosure.  Other than reporting increased deposits, the transaction is not made public.  This program is also available as a Certificate of Deposit (Commercial CD) and is similarly structured.

AMC allows banks to originate the cash deposit by simply issuing a Direct-Pay Letter of Credit on behalf of the bank to a trustee bank, which can be an off-balance sheet, in the footnotes item.  The cash deposit is then used as compliant collateral and AMC is prohibited any access to the funds by the bank.  The bank can return the funds or a portion of the funds at any time.  The bank takes the lead role in how they desire to internally structure the deal.  The funds are provided at a cost of floating, interest-only, 30-day Libor.  The deal is structured so that the bank does not pay any upfront fees.  
As stated above, the bank will be required to pay a monthly fee, plus a small annual renewal fee in the second and subsequent years.  We arrange to provide banks with cash deposits from $25mm on up—depending on the size and health of the bank.  Generally, we consider working with banks that have at least $3 billion in assets.

Typically, the deal is structured to renew annually (up to 7 years).  The funds will remain on deposit in the bank as long as the Direct-Pay Letter of Credit remains outstanding.  The bank may decide to reduce or increase the DPLC — and corresponding funds on deposit — in future years. 

Going into the program, the bank may also decide to initiate and phase out the program over time.  For example, a bank may decide to receive a cash deposit of $500mm and phase out the program beginning in the 3rd year lowering it to $300mm, then $200mm in the 4th year and zero by the end of the 7th year.  Any closing fees that were deducted from the loans proceeds are never paid back by the bank, to AMC.

Closing of a transaction generally requires no longer than 30 days of receipt of the Letter of Intent to issue the Direct-Pay Letter of Credit to AMC.

AMC Cash Deposit Process


A. The interest only (30-day Libor) payment is 60 days in default.  
B. The annual renewal fee is not paid.
C. The DPLC is no longer renewed by the bank at which time the  funds will be returned. 

Once the syndication is complete, AMC will arrange for the deposit of the full amount of the DPLC, less any one-time fees into an AMC, DDA at the bank.  The bank will then freeze the funds until the deal terminates.