We assume an entrepreneur (borrower) must borrow money from a lender (bank) to start a project in a single-period model. The debt is secured by an insurer who takes the project and pays the lender all the outstanding principal and interest in case of default. The borrower grants the insurer a...

We consider loan guarantees and security token offerings (STOs). If information is symmetric, STOs are better than loan guarantees. Under asymmetric information we identify the highest equity price making imitation unprofitable. A pooling (separating) equilibrium is reached through loan...