Securitisation Maximises Cashflow and Liquidity
Download full whitepaper. As uncertainty in the global economy rises, businesses of all sizes are increasingly turning to receivables securitisation as a low-cost funding source that also maximises liquidity. In the 30 years since the first trades were placed with investors in the US, the total outstanding amount of receivables securitis ...
Achieving IFRS Off-Balance-Sheet Treatment in Trade Receivables Securitizations
Abstract Changes in accounting requirements made in response to the financial crisis of 2007-2008 have made achieving off-balance-sheet treatment for trade receivables securitizations more challenging, particularly under IFRS. Fortunately, a cost-efficient solution has emerged and is proving practical and efficient. Despite the need to transfer ...
Auditors up the balance sheet scrutiny
Companies are receiving greater scrutiny from auditors over IFRS balance sheet accounting treatment of new and existing factoring facilities. It is not that the accounting rules have changed, but assessment and enforcement have become more deliberate. When employing IFRS off-balance securitisation and factoring structures, companies are governe ...
Trade Receivables Securitisations
Securitisation of various cash fl ow assets began in the 1980s. Trade receivables, while not the first asset class to be securitised, date back at least 25 years. Trade receivables securitisations allow companies to raise capital by selling, on a revolving basis, a selection of receivables to a legally separate, bankruptcy-remote special purpo ...
Working Capital – a Strategic Opportunity?
Introduction As any keen MBA student will relate, Michael Porter’s Five Forces* model can help management to determine the structure of their industry and provide a backdrop for strategy formulation. Understanding the structure of an industry is an important starting point for management in deciding whether to achieve competitive advantage ...
Introduction to Receivable Securitization
It has been almost 30 years now since the first securitizations of trade accounts receivable were structured and placed with investors in the U.S. financial markets. Since that time, these financings have grown to constitute an important part of the capital structure of many large, well-known companies around the world. At the same time, it is cl ...
Securitisation of Trade Receivables: An Alternative Source of Corporate Liquidity
Overview Securitisation is a powerful technique for deriving flexible and efficient liquidity from a corporation’s trade accounts receivables. It can provide committed, revolving funding on a non-recourse basis at a low ‘all-in’ cost, with the possibility for accounting sale treatment, term placement, or other useful features. Once the ...
Sharing the Business
As an arranger, structurer, administrator and reporting agent on trade receivables securitisations and other structured receivables finance products, we have been viewing the evolving trends and developments in this area of the market with particular interest. By way of background, I should point out that Finacity is not a lender nor an investo ...
Accounts Receivable Securitization
By various estimates, a tally of accounts receivable as reflected in the financial statements of U.S. companies would total approximately $10 trillion, with a comparable amount outstanding in Europe and more in the rest of the world. In order to bridge the typical timing gap of cash inflows and outflows, companies frequently seek funding from lende ...
Making Trade Securitisation Work
While there has been much debate over securitisation in general, there is often very little attention paid to the actual process through which securities are created, and the operations involved in monitoring and maintaining those securities. These topics are fairly standard and well-understood for most asset classes; but, for trade receivable se ...
Funding Through the Use of Trade Receivable Securitization
By various estimates, a tally of accounts receivable as reflected in the financial statements of U.S. companies would total approximately $6 trillion. For purposes of this discussion, we will refer to accounts receivable merely as “receivables,” companies that generate receivables as “sellers,” and we will only address commercial recei ...
Creative Thinking and Elbow Grease
In January, the Financial Accounting Standards Board (FASB) released FIN 46, an interpretation of Accounting Research Bulletin No. 51 (ARB 51), which addresses consolidation of so-called variable interest entities. The impetus was primarily Enron and its accounting abuses with respect to special purpose entities (SPEs). FIN 46 specifically relates ...
Breaking the Funding Barrier
Account receivables financing is a highly efficient means of satisfying many financial demands and has been employed in various forms for centuries. Notwithstanding the history and breadth of funding techniques, receivables are generally inefficiently funded despite their characteristics as one of the most creditworthy and liquid assets on a balanc ...