Achieve attractive returns on trade receivables
Our innovative solutions enable our clients to extend days payable outstanding while capture early payment discounts offered by suppliers
Working Capital Management is a key element to improve efficiency of internal financing activities for many large corporations. The ongoing digitalization of financial processes within corporates enables cost efficient implementation of alternative financing sources like “Approved Payables Financing“.
At the same time, corporates demand a diversified portfolio of financing partners and want to reduce their dependency from a single bank. The CRX Multi-Investor model opens a new market for banks and institutional investors to easily invest in approved short term trade receivables, as a cash or CP alternative and attractive asset class.
Program / Risk Structure
Banks can participate in the Multi-Bank as well as in the Multi-Investor solutions, whereas non-Bank investors can only participate in the Multi-Investor solution. The legal documentation of the CRX SCF Solutions is designed such that the only relevant risk taken by banks and investors is the default risk of the corporate obligor (“Buyer”).
Furthermore, in both solutions a complex technical integration with the Bank’s or Investor’s infrastructure is not necessary. It is rather supported by market-standard payment and settlement processes. The transfer of the receivables from Suppliers to the financing parties is intended to be true sale transactions where possible.
- Attractive rates
Higher investment return can be expected compared to other short term corporate investments like commercial papers.
- Transparent risk structure
Investors can buy short term notes containing the credit risk of only one corporate.
- Strengthen Client Relationship
As banks are known to the Buyer, they can strengthen their strategic relationship by financing the Buyer’s program.
- No License fee
Participation is free of charge for Banks and Investors.
Executive Summary Multi-Bank Structure
- In the CRX Multi-Bank APF module, a financing bank purchases Buyer-approved invoices directly from Suppliers
- There is no dilution risk of the Suppliers left due to the approval of invoices and an irrevocable obligation of the Buyer to pay the invoices at maturity directly to the Bank
- Credit lines allocated by Banks to the Buyer(s) are uncommitted and can be adjusted real-time
- Buyers allocate their credit line across all participating Suppliers
- Banks can assign credit lines per Buyer and currency and differentiate their bank financing rates based on the financing tenor
Executive Summary Multi-Investor Structure
- An integral part of the CRX Supply Chain Finance Platform is the CRX Multi-Investor APF module which enables banks and institutional investors to purchase corporate approved payables of a Buyer bundled by currency and maturity and issued in securities format
- SHOCONotes (Short-maturity Corporate Notes) with maturities of 30 to 180 days (depending on the program) offer superior yields in comparison to other short-dated debt instruments and are therefore an attractive cash investment alternative for investors
- The structure and the securitization process with a Luxembourg based securitization SPE and ring-fenced, bankruptcy remote compartments per Buyer delivers clean asset segregation and renders the issued Notes a risk profile very similar to corporate CPs
- SHOCO Notes should not be viewed as Asset Backed Securities as no pooling and tranching of risk takes place –all noteholders of a compartment are ranked equally
- SHOCO Notes are issued following a transparent auction process enabling investors to manage their orders in the context of the market
- Only registered investors previously accredited by CRX can join program specific auctions
- Clearing & Settlement of the Notes follow the well-established market-standard securities settlement procedures
- The Documentation will be complemented with a Private Placement Memorandum of the notes
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