CASE STUDY

Trade Receivables Securitisation

World’s Leading Logistics Company Completes €170m Securitisation

Logistics - Europe
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A PE backed global leading logistics company providing market leading freight management and contract logistics expertise working in 1,000 locations across 160 countries sought a solution to access liquidity at a favourable rate to support its operating companies in six European jurisdictions (Germany, UK, Netherlands, Spain, Belgium, France), each with two business lines, managing receivables in three currencies (€, $, £).

To address this, Demica delivered a securitisation of billed and unbilled trade receivables originated by the European operating companies with a funding limit of €170m split between two global banks. Providing a fully automated solution coupled with efficient transaction management, Demica’s engagement spanned Lead Advisor, Warm Back Up Servicer and Independent Reporting Agent.

As Lead Advisor, Demica’s highly experienced advisory and structuring teams developed an independent rating agency compliant securitisation model, resulting in the maximum advance rate possible and significantly above initial expectations.  Demica additionally managed the RFP process, provided Term Sheet advisory and completed extensive scenario analysis, facilitated by Demica’s proprietary technology.

Demica’s role extended to Warm Back Up Servicer, an important servicer risk mitigant, adhering to funding banks’ standards and credit requirements.

Following successful funding, Demica remained engaged in the transaction as Independent Reporting Agent.  The complex nature of the transaction across multiple currencies and multiple operating companies benefited from Demica’s technology solution which successfully consolidated data from the Client’s multiple systems to deliver required and enhanced reporting satisfying stakeholders ongoing needs. 

“This securitisation forms a pivotal part of our liquidity structure in Europe, and is transformational for us in terms of access to liquidity and cost of funds. Demica was instrumental in helping us deliver the deal on time, with better than expected outcomes.”
global logistics company
— Treasurer

In response to a need for access to liquidity, the net results of the programme are: 

  • Cheaper cost of funds;
  • Funding diversification;
  • Scalable programme;
  • Maximised receivable funding.

The transaction was designed to expand to additional operating companies, funders, jurisdictions, including outside of Europe, and the inclusion of a mezzanine note, delivering the Client with future optionality. 

€170m
Facility size
3 years
Length of relationship
6
Number of subsidiaries