The assets of troubled 'death bond' issuer ARM Asset Backed Securities (ARM), as well as Catalyst Investment Group, are set to be acquired by life settlement specialist Insetco.
The deal is subject to the agreement of ARM investors and on condition the company complies with rules set out by its home regulator in Luxembourg, the CSSF.
Earlier this week, the CSSF refused ARM a licence to operate as a regulated securitisiation vehicle.
ARM currently has outstanding liabilities for some £135m arising from a series of bonds it issued with various fixed maturity dates and coupons.
Insetco intends that these liabilities will be exchanged in full for new 7.5% Insetco Bonds, which will be issued upon completion of the deal.
The assets of ARM comprise the entitlement to cash from maturing senior life settlement policies, which have a face value of approximately £196m.
Together with uninvested cash to be acquired, this has a present estimated market value of approximately £50m.
Consideration for the acquisition of the assets of ARM will be met through the issuance of the new Insetco Perpetual Limited Recourse Bonds.
It said their value will reflect directly the market value of the ARM assets at completion.
Trading in Insetco on AIM has been temporarily suspended pending the publication of an admission document.
53% see global growth slowing
Affecting petrol prices
Come into force early 2019
370 people may have transferred
Two advisers so far