Insider Insights: How a Billionaire's Firm Facilitated Trump's $175 Million Bond Deal

Don Hankey, the chairman and majority shareholder of Knight Specialty Insurance, revealed to CNN that the agreement to underwrite former President Donald Trump's $175 million bond in New York was arranged swiftly. Trump provided all cash as collateral for the bond.

In a phone conversation, Hankey mentioned, "It's what we do. I'm glad to assist. We would have extended the same offer to anyone else. The transaction was simple and put together rapidly."

Knight Specialty Insurance, located in California, is recognized for offering subprime auto loans to individuals with lower credit scores.

Hankey, a supporter of Trump's presidential campaigns, recently contacted the Trump Organization to assist with securing a $464 million bond for the former president. With a fortune estimated at $7.4 billion by Forbes, Hankey has become a prominent figure in the financial industry.

Hankey told CNN that they discussed creating a bond of that magnitude. Later, the Trump team got in touch with Knight Specialty again after the bond amount was reduced to $175 million by a New York appeals court.

Trump initially planned to use a combination of investment-grade bonds and cash as collateral, with 80% bonds and 20% cash, according to Hankey. Despite Knight Specialty accepting the bonds, Hankey mentioned that they were ultimately not posted.

Hankey stated that in the end, Trump ended up providing all cash as collateral. He also mentioned that he is unaware of the source of the $175 million in cash that Trump used.

Hankey told CNN that he, his wife, and their two sons have previously contributed to Trump's presidential campaigns and intend to support him again in 2024.

Even though Hankey mentioned not receiving a direct message from the president, he shared that Eric Trump contacted him on Tuesday morning to express gratitude for their business.

It’s not the first time Hankey and Trump’s businesses were intertwined.

In 2022, Axos Bank, a California lender, loaned Trump $100 million to refinance the mortgage on Trump Tower.

Although Hankey is a leading shareholder in Axos and was at the time of the 2022 loan, he said he was not aware of the Trump Tower loan at the time.

Editor's P/S:

The revelation that Knight Specialty Insurance swiftly underwrote a $175 million bond for former President Donald Trump raises concerns about potential conflicts of interest and the influence of political connections in financial transactions. The fact that Trump provided all cash as collateral, despite initially planning to use a combination of bonds and cash, suggests that the transaction may have been tailored to meet his specific needs. Furthermore, Knight Specialty's acceptance of Trump's bonds, which were ultimately not posted, calls into question the company's due diligence process and adherence to underwriting standards.

Hankey's previous support for Trump's presidential campaigns and his recent contact with the Trump Organization raise further questions about the impartiality of Knight Specialty's involvement in this transaction. It is essential for financial institutions to maintain transparency and objectivity in their dealings with politically connected individuals, ensuring that decisions are made solely on the merits of the transaction and without regard to political affiliations or personal relationships.