Receivables Portfolio Purchase

Demica’s Receivables Portfolio Purchase solution enables large corporates to access additional liquidity through the sale of concentrated portfolios of receivables to large banks and institutional investors. Corporates can achieve advance rates between 85% - 95% through multi-jurisdictional, multi-currency programmes of between $30m to $500m. Demica’s automated solution uses its proprietary technology platform with its optimisation algorithm and integrations with trade credit insurers to deliver clients a higher advance rate at a lower cost of funds and a low ongoing administrative burden. The solution suits clients that require scale, operate in multiple jurisdictions or want the flexibility of a bespoke structure but are unable to meet the rating agency requirements of a securitisation.

Want to know more?

If you would like to speak to us about our solutions, please contact:
Angel G. Blanco

Angel G. Blanco

Director - Working Capital Solutions

Languages EN SP PO

+34 91 123 28 88 +44 74088 02700 Monday to Friday, 08:00 to 19:00 Contact Angel

HOW DOES IT WORK?

Receivables Portfolio Purchase is the true sale of concentrated portfolios of receivables, typically containing between 20 – 100 debtors, either directly to a funder or via an SPV. The solution uses a combination of rating agency methodology and credit insurance to partially wrap the portfolio, providing advance rates of between 85-95%. The solution is very efficient for bank regulatory capital leading to highly competitive rates. The facility is undisclosed and the seller maintains its relationship with its customers, continuing to collect the receivables directly.

 

Receivables Portfolio Purchase enables corporates to access off-balance sheet financing while accelerating the cash conversion cycle without incurring the cost of a full credit insurance wrap.

A wide range of clients use these structures ranging from investment grade telecoms companies, managing tight working capital metrics, to highly geared non-investment grade logistics and manufacturing companies whose primary objective is accessing low cost of funds, to large technology firms looking to reduce credit exposures in parts of their debtor ledger.

Receivables Portfolio Purchase, powered by the Demica platform, provides a valuable bank independent working capital solution that integrates directly with clients’ ERP systems as well as credit insurers to minimise the ongoing administrative burden on treasury teams while making syndicated transactions simple to arrange & manage. 

For clients with strong credit ratings, funders are often flexible on whether segregated collections accounts are necessary. Multi-jurisdictional programmes are relatively simple to arrange within regions (e.g. Europe) and can be taken global by adding multiple funders to the structure. 

HOW DOES DEMICA DELIVER THIS?

Demica can undertake several different roles in a Receivable Portfolio Purchase programme

ARRANGER

  • Sourcing senior, mezzanine and equity funding from global banks, institutional investors, and alternative finance providers 
  • With over $3bn of receivable transactions live, we have a unique understanding of investor appetite 

Advisor

  • Lead advisory services including structuring, modelling, and project management
  • Provided by a large team previously working at blue-chip financial institutions including global banks, major law firms, and rating agencies

servicer

  • Platform bridges multiple ERP & billing systems to create a consolidated shadow ledger
  • Sophisticated rules engine automates the selection of eligible receivables
  • Highly flexible reporting platform provides daily, weekly or monthly reporting

THE DEMICA ADVANTAGE

For Corporates

  • Accelerate cash conversion cycle 
  • Improve liquidity and leverage ratios
  • Off-balance sheet financing when appropriate
  • Ability to syndicate transactions across jurisdictions 
  • Access to 400+ finance firms through our partnership with Factor Chain International

For Funders

  • Ability to structure transaction to minimise regulatory capital requirements
  • Opportunities to deploy capital efficiently and at scale 
  • Excellent risk-adjusted returns with best-in-class risk mitigation 
  • End-to-end programme management from reporting to back-up servicing

CLIENT TESTIMONIALS

“Demica’s expertise and technology platform have consistently proven themselves over 10 years. We would not have been able to implement or manage the programme without them.”

THOMAS LANGER
-- Vice President Corporate Finance & Investor Relations, Brenntag

"Demica's expertise is impressive. Their technology is very adaptable, completely reliable and has enabled us to efficiently manage a complex programme without tying up internal resources.”

CORMAC MAGUIRE
-- Head of Treasury Operations, The Smurfit Kappa Group

Want to know more?

If you would like to speak to us about our solutions, please contact:
Angel G. Blanco

Angel G. Blanco

Director - Working Capital Solutions

Languages EN SP PO

Angel has over 10 years’ corporate banking experience holding senior global roles delivering Structured Trade Finance and Working Capital Solutions.
+34 91 123 28 88 +44 74088 02700 Monday to Friday, 08:00 to 19:00 Contact Angel

CASE STUDIES

Illustrating the depth of our client relationships, we have highlighted a few programmes powered by Demica

VIEW ALL CASE STUDIES