Strongtower Financial

The company credits its success to several key developments:

In 1999, responding to a need for immediate funding in a market traditionally dominated by best efforts underwriters, the company initiated an innovative bond-collateralized escrow loan program. This program allows STF, Inc. to fund escrow on issue date by arranging a loan taken out by the issuer and collateralized by the issuer’s bonds. STF’s retail brokers then distribute those bonds to investors, liquidating the loan. The inception of this program has given STF the ability to underwrite larger bond issues and more total volume than a best efforts process would typically support.

Product/Process Upgrades

In 2001 the company initiated a series of product and process upgrades designed to widen distribution channels and modernize investment services.

The first change involved upgrading the product. Previously, bonds had been underwritten on a when-issued basis and were not DTC eligible. Purchases were executed by direct subscription with the trustee/paying agent. In 2001, the company changed all that. Bonds are now underwritten and accrue interest from the dated date. In addition, the bonds are now DTC eligible and deposited at DTC by the trustee, making them tradable on standard brokerage platforms in book entry form.

At the same time, STF contracted with one of the nation’s largest clearing brokers to begin providing transaction clearing and account custody. All transactions are now executed through the clearing firm and bonds are held in brokerage accounts.