Trade Receivables Securitisation

Demica’s Trade Receivables Securitisation solution provides our clients with committed, flexible and scalable receivables based financing of between $30m to over $1bn. It enables the sale of multi-jurisdictional and multi-currency receivables, across their operating companies, in a single transaction to the asset backed securitisation market. Demica’s team provides upfront advisory services leveraging our proprietary technology to automate and simplify complex transactions, resulting in a higher advance rate and lowest cost of funds for clients. Demica optimises financing by working with different sources of capital and provides reporting and backup servicing over the life of the transaction.

Want to know more?

If you would like to speak to us about our solutions, please contact:
Mansour Davarian

Mansour Davarian

Director - Working Capital Solutions

Languages EN

+44 (0) 20 7450 2505 Monday to Friday, 08:00 to 19:00 Contact Mansour

WHAT IS trade receivables securitisation?

Platform Demonstration

TRADE RECEIVABLES SECURITISATION

Play Video
  • 1 – 5 years committed facilities
  • Flexible and scalable financing programmes
  • Lower cost of funds versus alternative forms of financing 
  • Multi-jurisdiction, multi-currency, multi-opco programmes 
  • Off-Balance Sheet treatment available (US GAAP and IFRS)
  • Access to over 35 bank and institutional funders

HOW DOES IT WORK?

Trade receivables securitisation is the sale of a company’s receivables on a non-recourse, true sale, basis to a bankruptcy remote special purpose vehicle (SPV). The facility is undisclosed and the seller maintains its core relationship with its customers, continuing to collect the receivables directly. The SPV funds the purchase of the receivables by issuing a senior note to third party investors.

The advance rate calculation considers a number of factors including the structure, agreed eligibility criteria, historical performance of the receivables, and debtor concentrations to calculate the specific rating. Exclusions from the portfolio may include underlying contracts that prohibit the sale of the receivables and certain jurisdictions or currencies that are deemed to be excluded by the underlying investor. Other elements of the calculation include establishing reserves which encompass dynamic losses, dilutions, interest rate, yield and servicing, with typical advance rates on portfolios reaching between 80-90%. 

Demica’s advanced packing algorithm optimises the portfolio of receivables by iterating the combination of different eligibility criteria, concentrations and exclusions, to maximise the amount advanced under the securitisation while still meeting the funder’s credit model. Our highly flexible technology platform and rules engine determines which receivables are eligible for funding, provides straight through processing on transaction reporting and funding calculations, and enables us to provide warm back up servicing when required.

Demica has over 15 years’ experience in establishing and managing Receivables Finance solutions in various formats. Trade Receivables securitisations can be funded by our clients’ relationship banks as well as a wide range of Demica’s Investor Partners, providing flexible funding at the lowest cost of capital.

HOW DOES DEMICA DELIVER THIS?

Demica can undertake several different roles in a Trade Receivables Securitisation 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 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

  • Higher advance rates
  • Lower cost of funds
  • Off-balance sheet treatment under IFS and US GAAP (subject to circumstances)
  • Access to diverse and proprietary pools of capital 
  • Expertise built-up with over 15 years of securitisation experience managing more transactions than any one bank

For Funders

  • Opportunities to deploy capital efficiently and in scale 
  • Excellent risk-adjusted returns
  • Best-in-class risk mitigation leading to zero losses over 15 years
  • End-to-end programme management from reporting to back-up servicing 
  • Flexible structures and early input into programme parameters

CLIENT TESTIMONIALS

“Demica’s technology is very reliable and has no problem efficiently handling high volumes of diverse and complex invoices. They have been an excellent partner to Flextronics and we wouldn’t hesitate to recommend them.”

ANITA BUBNA
-- Director, Treasury, Flextronics

“Demica helped us to capitalise on our trade debt assets to gain access to a relatively low cost, low volatile source of finance, with greatly advantageous rewards for ISS.”

BARBARA PLUCNAR JENSEN
-- Senior Vice President, Head of Group Treasury, ISS

Want to know more?

If you would like to speak to us about our solutions, please contact:
Mansour Davarian

Mansour Davarian

Director - Working Capital Solutions

Languages EN

Mansour brings over 10 years of origination and structuring experience in credit, lending and structured finance, executing and managing transactions for global large corporates across a number of jurisdictions.
+44 (0) 20 7450 2505 Monday to Friday, 08:00 to 19:00 Contact Mansour

CASE STUDIES

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

VIEW ALL CASE STUDIES