SOURCE: Protective Capital Structures Corp.

March 02, 2009 11:32 ET

Protective Capital Structures Corp. Uses Stock to Guarantee BCLOC Business Loan

WILMINGTON, DE--(Marketwire - March 2, 2009) - Protective Capital Structures Corp. (PINKSHEETS: PCSO) announced today that it closed its first BCLOC Business Loan in an amount of $6,000,000 using its Series A Preferred Shares as collateral on February 20, 2009. The BCLOC Business Loan carries a 2.67% interest rate for 10 years and is amortized starting in the 11th year for 30 years.

The business that received this BCLOC Business Loan has 22 employees and has been in the Information Technology business for over 25 years. The subsidiary has typically used standard bank financing to provide working capital. The BCLOC Business Loan was structured to help the IT business develop new services, expand its employment base and ultimately increase its cash flow over the next 10 years.

This BCLOC Business Loan will allow the business to receive $6,000,000 of PCSO common stock from the conversion of $6,000,000 PCSO Series A Preferred Shares. The business is expected to sell the PCSO common shares, over a 36 month period, of which $2,245,000 may be used as working capital and $3,755,000 will pay off existing bank debt. The BCLOC Business Loan is projected to help increase the borrower's net margins and allow the business to carry out its Business Plan over the next 10 years at a lower cost of funds.

PCSO earned a 5% origination fee or $300,000 and is expected to receive $160,200 yearly in interest plus servicing revenue of 1.25% or $75,0000 on the outstanding Principal Loan Balance boosting its potential income on the BCLOC Business Loan to $235,200 annually. The Business Loan cannot be pre-paid for 10 years and it will amortize at a rate of 8.50%, starting in the 11th year until the year 2048, but the Business Loan can be paid at any time in the 11th year with a pre payment penalty of 10% decreasing to 0% over the next 10 years.

The BCLOC Business Loan has been subordinated to the existing bank debt, but PCSO will be entitled to receive payments of interest when due.

About PROTECTIVE CAPITAL STRUCTURES CORP.

The PCSO business model, which is implemented through its subsidiary, Independent Capital Credit Corporation, is to arrange financing for real property and commercial revenue producing assets and to provide a comprehensive range of solutions to the business market focused on earnings and operational excellence. For more information, visit: www.protectivecapitalstructurescorp.com.

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The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking information made on the company's behalf. All statements, other than statements of historical facts which address the company's expectations of sources of capital or which express the Company's expectation for the future with respect to financial performance or operating strategies, can be identified as forward-looking statements. Such statements made by the company are based on knowledge of the environment in which it operates, but because of the factors previously listed, as well as other factors beyond the control of the company, which include the ability of the company to implement its business plans and expand its business model, actual results may differ materially from the expectations expressed in the forward-looking statements.

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