Securing the LC from a bank under the 3(a)(2) provision was a new type of ask of a bank. Essentially, they provide through the LC a guarantee of liquidity and loss for investors. They construct their LC commitment through conventional loan covenants, the most important of which is the Loan to Value (LTV). This means that their loan for the mortgage and the LC combine to be a maximum of 75% of the value of the building owned by the CIT

Four factors generate the level of and escalation of the LC amount over the time of the investment:

1) Share price; 2) # of investors; 3) Investor aggregate monthly investment amount; 4) amount of time investors hold their investment; 5) Dollar limit of investor protection (EPCIT currently has no cap on the amount of protection for investors. We are advising replicators to cap the protection for investors at a certain dollar level)