Counterparty Risk Mitigation Strategies for Commodity Merchants
|
|
- Elwin Lindsey
- 8 years ago
- Views:
Transcription
1 Counterparty Risk Mitigation Strategies for Commodity Merchants By Alice Birnbaum As many clients of the BBH Commodities & Logistics group are well aware, recent consolidation among commodity consumers particularly in the soft commodity sector (e.g., coffee, cocoa and sugar) has created pressure on merchants to lengthen payment terms for many of their larger customers. The result has been greater counterparty exposures, increased working capital financing needs for commodity traders, and pressure on commodity financiers to increase accounts receivable limits to certain customers. An important role of a merchant in the supply chain has long been to provide liquidity and credit in the marketplace, which has recently been accentuated as large, multinational players lean on small and midsize merchants for unsecured financing. This dynamic has been driven in part by the leverage taken on by these multinational companies, which are in many ways leaning on trade vendors for funding. 16 Brown Brothers Harriman COMMODITY MARKETS UPDATE
2 In response to this market phenomenon, market stakeholders including merchants, banks, insurers, and supply chain technology and software providers are working together to develop risk mitigation solutions. Fortunately, there are instruments today to help alleviate counterparty risk including trade credit insurance and accounts receivable finance. This article summarizes some of the pros and cons of these two different solutions. Trade Credit Insurance Let s first look at the trade credit insurance marketplace, which is generally bifurcated into two types of insurance providers: creditworthiness. This type of insurance can be particularly helpful to smaller commodity traders that seek to augment or largely outsource their in-house credit monitoring functions. The cancelation feature of these policies is especially important to a monoline insurer given that risk is positively correlated across its business, as the carrier is only insuring trade credit risk. This was especially pronounced during the 2008 global financial crisis when insurers with cancelable coverage exercised their option to cancel credit limits, albeit at a time when many policyholders most needed the coverage. Monoline Insurance Monoline insurance carriers provide a single type of insurance coverage, principally underwriting cancelable trade credit insurance policies, otherwise known as whole turnover or ground-up coverage. Ground-up programs comprise roughly 80% of the global trade credit insurance market, and this segment of monoline trade credit insurers is dominated by the big three carriers: Coface, Atradius, and Euler Hermes. 1 Under ground-up programs, these insurers set credit limits for counterparties, but if the carrier perceives the condition of a covered counterparty to have deteriorated, it is able to amend or cancel coverage altogether on a particular name, while preexisting credit exposure remains covered. Monoline insurers underwrite risk across the full spectrum of industry participants, from small and medium-sized businesses to the very largest multinational enterprises. As noted, their policies often feature whole turnover or ground-up coverage, which insures a policyholder s entire customer base, with per-debtor credit limits preapproved for larger accounts and a discretionary limit covering smaller accounts. Cancelable trade credit insurance buyers often view the insurer s ongoing credit risk monitoring of debtors as additive to their own internal risk management function, as it can serve as a virtual outsourced credit department. Monoline carriers have vast databases that afford them the ability to monitor entire industry sectors and counterparties in ways that most individual merchants cannot match. Action by a monoline insurer can provide a warning sign in the event of a decline in a counterparty s 1 Source: Marsh USA Property and Casualty (P&C) Insurance Property and casualty (P&C) insurance carriers underwrite a variety of insurance policy types covering accident and health, directors and officers liability insurance (D&O) and professional liability, property and casualty, surety, and credit risk. Credit risk for most P&C insurers includes trade credit which covers the typical commercial and political risks found in most trade credit insurance policies as well as structured credit. Credit insurance typically comprises a small percentage of a P&C insurer s overall book of business; however, it is often disproportionately important to the carrier given its role in diversifying the insurer s risk. P&C insurers generally find credit insurance attractive, as the risks are uncorrelated to those inherent in their larger lines of business. Most P&C insurers underwrite non-cancelable, non-payment insurance policies. Non-cancelable policies generally comprise roughly 20% of the total trade credit insurance market. 1 These insurers include ACE, AIG, Equinox, FCIA, HCC, QBE, XL, and Zurich, while Atradius and Euler also offer a similar program in addition to their traditional ground-up coverage. For non-payment insurance policies, once a counterparty is approved for coverage, the insurer cannot cancel coverage for the duration of the credit limit period. Since the 2008 financial crisis, in response to many insurers exercising their right to cancel credit limits under cancelable trade credit policies, purchasers are increasingly choosing policies with non-cancelable credit limits to protect themselves against adverse action by the insurer. The offset to this type of committed coverage is that the self-insurance in the form of a deductible is higher than a ground-up program, and the insurer October
3 will not be able to provide the insured party with the same level of detail on the customer portfolio. In addition, providers of non-cancelable, non-payment insurance policies tend to be more selective than monoline carriers in whom they insure and the policy types they offer. For example, medium- and large-sized companies seeking trade credit protection are often offered coverage not for their entire account debtor base, but rather for specific catastrophic account debtor risk. Regardless of the size of the insured party, in the event a P&C insurer does offer non-cancelable coverage on an entire account debtor base or the majority thereof, the policy will likely feature a significant discretionary credit limit that allows the policyholder to use its own judgment in extending credit to customers up to an agreed amount per counterparty. In these instances, the insurer will place particular emphasis on the underwriting of the insured s in-house credit procedures. As a result, these types of non-cancelable trade credit policies are often best suited for merchants with a well-developed, structured approach to credit risk management. While terms vary widely across the market depending on the carrier, some of the most common features of a trade credit insurance policy include: Cancelable or non-cancelable country and counterparty limit(s) Single or multi-debtor policy Definition of risks covered Policy or per-counterparty deductible Credit limit for each counterparty Aggregate credit limit across all counterparties (for multidebtor policies) Coverage provided per loss Discretionary credit limit per buyer Policy term usually 12 to 24 months Premium charged monthly or annually and calculated as a percentage of sales to or receivables due from insured debtors Reporting including annual renewal of buyer limits, declaration of turnover report with a specific period s total sales to a debtor (used for premium calculation purposes), past due receivable reporting, and receivable aging reports Accounts Receivable Finance While trade credit insurance is the most common way for commodity merchants to mitigate their counterparty and customer credit risk, the amount of coverage available has, in certain cases, proven to be insufficient in light of the trends discussed in this article. As a result, banks and, increasingly, capital markets investors have begun to show a keen interest in financing the accounts receivable of these parties through the creation of short-term paper. The trend toward receivable disintermediation has only accelerated as a result of more stringent capital requirements for banks and increasing investor demand for yield in today s low interest rate environment. While low commodity prices have reduced utilization rates on credit facilities perhaps slowing the trend of increasing usage of capital markets this trend is likely to continue longer term. Accounts receivable financing is typically executed through the outright sale of an accounts receivable to a third party. As soon as a company books a receivable from its customer and that receivable is confirmed by the customer, the receivable is sold at a slight discount to a third-party purchaser. The discount reflects an imputed interest rate that provides the return to the investor. These transactions provide immediate cash to the seller of the receivable rather than having to wait the full payment period provided to its customer. In many cases, the seller receives a higher percentage of the receivable value than it might in a typical asset-backed or commodity-based lending structure. The universe of third-party receivable buyers ranges from traditional commercial banks to formal asset-backed securities vehicles with capital provided by fixed income investors, who are looking for current yield with minimal duration risk. Regardless of which structure a merchant pursues, a key consideration for the seller of the receivable is determining whether it is executing on a recourse, limited recourse, or non-recourse basis. In a recourse or limited recourse structure, the buyer of the receivable has rights to the seller s balance sheet in the event that the purchased receivable is not fully collected because of obligor insolvency or otherwise. This is typically preferable to investors, given the additional layer of risk protection derived from the seller s balance sheet, but is suboptimal for the seller. In contrast, in a non-recourse transaction, the seller of the receivable avoids the assumption of direct or contingent debt on its balance sheet since the receivable is sold outright and there 18 Brown Brothers Harriman COMMODITY MARKETS UPDATE
4 is no recourse to the seller if the obligor defaults. How many receivables a company chooses to sell depends on its business need and could vary from one to all of its receivables. Receivable finance programs are offered by thirdparty trade finance providers in addition to some commercial banks. The structures can range from less formal arrangements with banks in which receivables are sold on a case-by-case basis, to more formal securitizations with specific terms and guidelines for eligible collateral. The securitized notes are then sold to fixed income investors. For example, a large commodity trader recently issued $300 million in public notes to investors backed by trade receivables, which included two tranches of floating rate notes at a spread over one-month LIBOR of 95 and 225 basis points, respectively. Since the 2008 financial crisis, in response to many insurers exercising their right to cancel credit limits under cancelable trade credit policies, purchasers are increasingly choosing policies with non-cancelable credit limits to protect themselves against adverse action by the insurer. Critical to distinguishing which receivable finance provider works best for a company is the provider s flexibility in developing and implementing a suitable trade finance program and the provider s ability to fund these programs. Conclusion The importance of managing liquidity and counterparty risk is essential for companies to remain healthy and able to pursue new business opportunities; however, certain factors exist that are making it harder, especially for small and midsize merchants, to comfortably manage these risks. Fortunately, there are resources available to help reduce pressure on merchants and support working capital needs and credit risk mitigation. For more information on trade credit insurance or receivable finance programs, please contact your BBH relationship manager or Alice Birnbaum (Alice.Birnbaum@bbh.com or ). Some information provided by Marsh USA. October
5 This publication is provided by Brown Brothers Harriman & Co. and its subsidiaries ( BBH ) to recipients, who are classified as Professional Clients or Eligible Counterparties if in the European Economic Area ( EEA ), solely for informational purposes. This does not constitute legal, tax or investment advice and is not intended as an offer to sell or a solicitation to buy securities or investment products. Any reference to tax matters is not intended to be used, and may not be used, for purposes of avoiding penalties under the U.S. Internal Revenue Code or for promotion, marketing or recommendation to third parties. This information has been obtained from sources believed to be reliable that are available upon request. This material does not comprise an offer of services. Any opinions expressed are subject to change without notice. Unauthorized use or distribution without the prior written permission of BBH is prohibited. This publication is approved for distribution in member states of the EEA by Brown Brothers Harriman Investor Services Limited, authorized and regulated by the Financial Conduct Authority (FCA). BBH is a service mark of Brown Brothers Harriman & Co., registered in the United States and other countries. Brown Brothers Harriman & Co All rights reserved PB
An Overview of Trade Credit Insurance. Author: Joe Ketzner Executive Vice President, Commercial Euler Hermes
An Overview of Trade Credit Insurance Author: Joe Ketzner Executive Vice President, Commercial Euler Hermes Table of Contents Introduction...3 More about Trade Credit Insurance...4 Philosophy of Trade
More informationMANAGING CREDIT RISK IN A VOLATILE MARKETPLACE
Export Forum 2015 October 14, 2015 MANAGING CREDIT RISK IN A VOLATILE MARKETPLACE Presented by: George Babeu, President One Source Risk Management and Funding, Inc. WHAT WE WILL DISCUSS Today s volatile
More informationHow To Get Credit Risk Out Of Your Business
Receivables insurance Protection against the biggest unidentified exposure facing Canadian business Presentation to: Alberta Trade Contractors Coalition By: Ian Miller Receivables Insurance Association
More informationA Guide to Credit Insurance
Introduction...page 1 Options for Mitigating Credit Risk...page 2 A Guide to Credit Insurance from Euler Hermes What is Credit Insurance?...page 3 The Basis of Credit Insurance...page 5 Conclusion...page
More informationAtradius Presents: Financing and Business Insurance Part 2: Introduction to Credit Insurance. Brett Halsey President
Atradius Presents: Financing and Business Insurance Part 2: Brett Halsey President Introduction to Credit Insurance Atradius Presents Introduction to Credit Insurance What is Credit Insurance? Definition
More informationCompanies turning to Trade Credit Insurance in an unpredictable and debt-laden world
Companies turning to Trade Credit Insurance in an unpredictable and debt-laden world Companies turning to Trade Credit Insurance in an unpredictable and debt-laden world On the heels of a period of financial
More informationTerms and Techniques to Manage Receivables, Protect Assets and Enhance Working Capital
Terms and Techniques to Manage Receivables, Protect Assets and Enhance Working Capital TERM / TECHNIQUE DEFINITION APPLICATIONS ADVANTAGES DISADVANTAGES Open Account Terms Seller makes shipment and awaits
More informationWith the large universe of investment opportunities
Investing The Opportunity in Middle-Market Direct Lending Thomas Martin Assistant Vice President Investment Strategy Analyst With the large universe of investment opportunities available in public fixed
More informationPrivate Debt in 2015:
Private Debt in 2015: Thinking Outside the Bank The confluence of bank regulation, low yields on traditional fixed income, and a strong supply of potential US and European borrowers has convinced more
More informationArranging insurance backed trade finance structures
Arranging insurance backed trade finance structures London Countertrade Roundtable Ian Henderson 21 March 2012 Current environment Economic environment Bank liquidity: Fewer global players active in trade
More informationSBA EXPORT LOAN PROGRAMS
SBA EXPORT LOAN PROGRAMS Patrick Hayes, Regional Manager SBA Export Solutions Group U.S. Export Assistance Center 600 Superior Avenue, Suite 700 Cleveland, OH 44114-216-522-4731 patrick.hayes@sba.gov SBA
More informationCommercial Paper Conduritization Program
VII COMMERCIAL PAPER BACKED BY CREDIT CARD RECEIVABLES INTRODUCTION Asset-backed commercial paper (ABCP) conduits issue short-term notes backed by trade receivables, credit card receivables, or medium-term
More informationThe IRC 2015 Insurers Analysis: Annual Summary of 2014 Insurance Company Financial Statements
The IRC 2015 Insurers Analysis: Annual Summary of 2014 Insurance Company Financial Statements Prepared by IRC Security Committee June 2015 T a b l e o f C o n t e n t s Objective Purpose and scope of the
More informationENERGY INDUSTRY INSURANCE SOLUTIONS
Summer 11 ENERGY INDUSTRY INSURANCE SOLUTIONS ELECTRICITY PRICE & FORCED POWER OUTAGE COVERAGE WEATHER DERIVATIVES SYSTEM PERFORMANCE INSURANCE TRADE CREDIT INSURANCE ACCOUNTS RECEIVABLE PUTS NON CANCELLABLE
More informationTrade Credit Insurance: A Strategic Tool In Times of Economic Instability & Uncertainty
Trade Credit Insurance: A Strategic Tool In Times of Economic Instability & Uncertainty David Dienesch Euler Hermes Canada Andrew Leonard Marsh Canada Limited ECONOMIC UPDATE Uncertain economic environment
More informationManaging Trade Risk and Business Credit Insurance. Association of Independent Corrugated Converters
Managing Trade Risk and Business Credit Insurance Association of Independent Corrugated Converters Sept 11, 2009 "Capitalism without failure is like religion without sin it just doesn t work. Adam Smith,
More informationRecourse vs. Nonrecourse: Commercial Real Estate Financing Which One is Right for You?
Recourse vs. Nonrecourse: Commercial Real Estate Financing Which One is Right for You? Prepared by Bill White Director of Commercial Real Estate Lending In this white paper 1 Commercial real estate lenders
More informationfrom Chubb Are you ready to unleash
Trade Credit Insurance from Chubb Are you ready to unleash thepowerof your accounts receivable? Extending credit to a customer is serious business. Once a sale is made, accounts receivable yield no further
More informationDivision 9 Specific requirements for certain portfolios of exposures
L. S. NO. 2 TO GAZETTE NO. 43/2006 L.N. 228 of 2006 B3157 Division 9 Specific requirements for certain portfolios of exposures 197. Purchased receivables An authorized institution shall classify its purchased
More informationA Roadmap to Defining an Optimal FX program
A Roadmap to Defining an Optimal FX program Investment managers are faced with increased pressure to assess whether their foreign exchange programs deliver value to their stakeholders and achieve optimal
More informationAn Alternative Way to Diversify an Income Strategy
Senior Secured Loans An Alternative Way to Diversify an Income Strategy Alternative Thinking Series There is no shortage of uncertainty and risk facing today s investor. From high unemployment and depressed
More informationVehicle Service Contract Finance
Vehicle Service Contract Finance Niche commercial finance industry with limited competition and high margins The vehicle service contract (VSC) finance industry offers strong returns and a compelling diversification
More informationAccounting for securitizations treated as a financing (on-balance sheet) verses securitizations treated as a sale (off-balance sheet)
Accounting for securitizations treated as a financing (on-balance sheet) verses securitizations treated as a sale (off-balance sheet) The hypothetical example below is provided for informational purposes
More informationStrategy Monthly. Unfixed Income. May 26, 2015
Strategy Monthly Unfixed Income The yield on traditional fixed income this year has been anything but fixed. From a low of. % on the last day of January, the yield to maturity on the ten year Treasury
More informationTEXTRON FINANCIAL CORPORATION
TEXTRON FINANCIAL CORPORATION Quarterly Financial Statements (Unaudited) For the fiscal quarter ended Textron Financial Corporation is a wholly-owned subsidiary of Textron Inc. Beginning with the quarter
More informationBEGINNERS GUIDE TO YOUR GUIDE TO CREDIT INSURANCE
BEGINNERS GUIDE TO YOUR GUIDE TO CREDIT INSURANCE CONTENTS Chapter 1 The Basics 2 What is Credit Insurance? Why is Credit Insurance so Important? Who is Credit Insurance Suitable For? Chapter 2 Benefits
More informationCondensed Interim Consolidated Financial Statements of. Canada Pension Plan Investment Board
Condensed Interim Consolidated Financial Statements of Canada Pension Plan Investment Board September 30, 2015 Condensed Interim Consolidated Balance Sheet As at September 30, 2015 As at September 30,
More informationWealth Planning. Wealth Planning for the Sale of a Business
Wealth Planning Wealth Planning for the Sale of a Business JULY 2014 Selling your business may be the most important financial event in your life. In some cases, the business has been family-owned for
More informationGEORGIA STATE FINANCING AND INVESTMENT COMMISSION (GSFIC) Policy and Procedures, Owner Commission
GEORGIA STATE FINANCING AND INVESTMENT COMMISSION (GSFIC) Policy and Procedures, Owner Commission Policy Title/Number QUALIFIED INTEREST RATE MANAGEMENT AGREEMENTS FOR STATE AUTHORITIES Effective Date:
More informationMarket Risk Capital Disclosures Report. For the Quarter Ended March 31, 2013
MARKET RISK CAPITAL DISCLOSURES REPORT For the quarter ended March 31, 2013 Table of Contents Section Page 1 Morgan Stanley... 1 2 Risk-based Capital Guidelines: Market Risk... 1 3 Market Risk... 1 3.1
More informationSimply put, factoring is a transaction where a company sells its invoices at a discount in exchange for quick funds.
Imagine your growing business just made a six-figure sale to a company across the country. The problem? The buyer has 60 days to pay, but your cash flow is limited, meaning you can t afford the immediate
More informationOperating Leases: Implications for Lessees Credit. Overview and Conclusions
Special Report Overview and Conclusions Operating leases are widely used by businesses to gain control of assets, such as real estate or equipment, for a fixed duration less than the full economic life
More informationCOPYRIGHTED MATERIAL. What do David Bowie, James Brown, the Isley Brothers, and Rod. Introduction CHAPTER 1
CHAPTER 1 Introduction What do David Bowie, James Brown, the Isley Brothers, and Rod Stewart have in common? The obvious answer is that they are all recording artists. The financial professional would
More information310-10-00 Status. General
Checkpoint Contents Accounting, Audit & Corporate Finance Library Standards and Regulations FASB Codification Codification Assets 310 Receivables 310-10 Overall 310-10-00 Status Copyright 2014 by Financial
More informationHIGH YIELD FINANCING Middle Market. ELA 45th Annual Convention Palm Desert, CA October 22 24, 2006
HIGH YIELD FINANCING Middle Market ELA 45th Annual Convention Palm Desert, CA October 22 24, 2006 Värde Partners, Inc. Founded in 1993 $2.5 billion assets under management Minneapolis and London offices
More informationPremium Financing of Life Insurance
Element Insurance Partners 13520 California Street Suite 290 Omaha, NE 68154 402-614-2661 dhenry@elementinsurancepartners.com www.elementinsurancepartners.com Premium Financing of Life Insurance Page 1
More informationAIG TRADE CREDIT INSURANCE Protecting Your Accounts Receivables Your Most Valuable Asset
A AIG TRADE CREDIT INSURANCE Protecting Your Accounts Receivables Your Most Valuable Asset The Need for Credit Insurance Sales is the journey; cash is the destination. AIG Trade Credit helps companies
More informationTHE EVOLVING FACE OF FACTORING. By Harvey S. Gross
THE EVOLVING FACE OF FACTORING By Harvey S. Gross There is a common belief that companies factoring their receivables do so only when they are in trouble. Nothing could be further from the truth. Since
More informationMEASUREMENTS OF FAIR VALUE IN ILLIQUID (OR LESS LIQUID) MARKETS
MEASUREMENTS OF FAIR VALUE IN ILLIQUID (OR LESS LIQUID) MARKETS Objective The objective of this paper is to discuss issues associated with the measurement of fair value under existing generally accepted
More informationNotes to Consolidated Financial Statements Note 1: Basis of Presentation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS to Consolidated Financial Statements Note 1: Basis of Presentation Bank of Montreal ( the bank ) is a public company incorporated in Canada having its registered
More informationAon Risk Solutions. Aon Trade Credit. Unlocking the Value of Trade Credit Insurance
Aon Risk Solutions Aon Trade Credit Unlocking the Value of Trade Credit Insurance Trade Credit and the Global Economy If your business crosses borders, consider these questions: Do you regularly sell to
More informationQ4. How should institutions determine if they may exclude asset-based loans (ABL) from their definition of leveraged loans?
Board of Governors of the Federal Reserve System Federal Deposit Insurance Corporation Office of the Comptroller of the Currency Frequently Asked Questions (FAQ) for Implementing March 2013 Interagency
More informationIs Account Receivables Your Largest Asset? Unleash the Hidden Values A/R Insurance Can Deliver to Your Company. Presented by Glenn Robins
Is Account Receivables Your Largest Asset? Unleash the Hidden Values A/R Insurance Can Deliver to Your Company Presented by Glenn Robins US Companies Profile On Insuring Assets Compare Balance Sheet Assets
More informationHow to protect, inform & grow your business with trade credit insurance
Aon Risk Solutions How to protect, inform & grow your business with trade credit insurance Risk. Reinsurance. Human Resources. 2 How to protect, inform & grow your business with trade credit insurance
More informationAccounts Receivable Management Solutions
Accounts Receivable Management Solutions from Accounts Receivable Management Solutions from www.eulerhermes.us Is one of your largest assets unprotected? There is a greater chance that a business will
More informationTop Considerations Before Hiring a Private Wealth Manager
Special Commentary Top Considerations Before Hiring a Private Wealth Manager Hiring a private wealth manager can seem like a complicated decision. This is especially the case for those who may not have
More informationTrade Finance Update for Multinationals and Financial Institutions
Trade Finance Update for Multinationals and Financial Institutions A Discussion on Recent Developments in Trade Finance Presented by: Ricardo Martinez, Partner, New York Lloyd Winans, Partner, New York
More informationLIQUIDITY RISK MANAGEMENT GUIDELINE
LIQUIDITY RISK MANAGEMENT GUIDELINE April 2009 Table of Contents Preamble... 3 Introduction... 4 Scope... 5 Coming into effect and updating... 6 1. Liquidity risk... 7 2. Sound and prudent liquidity risk
More informationCondensed Interim Consolidated Financial Statements of. Canada Pension Plan Investment Board
Condensed Interim Consolidated Financial Statements of Canada Pension Plan Investment Board December 31, 2015 Condensed Interim Consolidated Balance Sheet As at December 31, 2015 (CAD millions) As at December
More informationEuler Hermes World Agency. Your world, our world
Euler Hermes World Agency Your world, our world Your world, our complete 360 solutions Delivering tailored solutions Understanding global risk As a multinational, you have operations around the world and
More informationProf Kevin Davis Melbourne Centre for Financial Studies. Managing Liquidity Risks. Session 5.1. Training Program ~ 8 12 December 2008 SHANGHAI, CHINA
Enhancing Risk Management and Governance in the Region s Banking System to Implement Basel II and to Meet Contemporary Risks and Challenges Arising from the Global Banking System Training Program ~ 8 12
More informationAmerican Express Fixed Income Presentation. May 2008 Update
American Express Fixed Income Presentation May 2008 Update Agenda AXP Overview Performance AXP Capital & Funding Management 2 Company Overview American Express is a leading global payments and travel company
More informationExploring Exports: Financing Your Export Sales
Exploring Exports: Financing Your Export Sales Presented by: Scott K. Hibbard, Vice President International Trade Finance February 9, 2012 Agenda Overview: Global Trade Trends Trade Cycle, Trade Risks,
More informationStructured Products. Designing a modern portfolio
ab Structured Products Designing a modern portfolio Achieving your personal goals is the driving motivation for how and why you invest. Whether your goal is to grow and preserve wealth, save for your children
More information[ 2 ] Basic Securitization Structure. [ 1 ] Securitization and Monetization. Ⅰ Basic Structure of Real Estate Securitization. Structured finance
Ⅰ Basic Structure of Real Estate Securitization [ 1 ] Securitization and Monetization Asset securitization is where a financial institution or other business that owns assets places those assets in a structure
More informationDFA INVESTMENT DIMENSIONS GROUP INC.
PROSPECTUS February 28, 2015 Please carefully read the important information it contains before investing. DFA INVESTMENT DIMENSIONS GROUP INC. DFA ONE-YEAR FIXED INCOME PORTFOLIO Ticker: DFIHX DFA TWO-YEAR
More informationTrade Credit Insurance. Availability and Practice Within the Region
Trade Credit Insurance Availability and Practice Within the Region Presented by Alan J Wallace Joint Managing Director IRC Europe Agenda A Brief History of Trade Credit Insurance Current Global Underwriting
More informationFair Value Measurement
Indian Accounting Standard (Ind AS) 113 Fair Value Measurement (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type
More informationTrade Credit Insurance Bad Debt Protection
Bad Debt Protection What is? > Coverage provided to companies who sell products to other businesses (b2b) on short-term credit (30/60/90 days) for both domestic and export sales > Indemnification for bad
More informationKKM ARMOR Fund Class A Shares (Symbol: RMRAX) Class I Shares (Symbol: RMRIX)
KKM ARMOR Fund Class A Shares (Symbol: RMRAX) Class I Shares (Symbol: RMRIX) KKM U.S. Equity ARMOR Fund Class A Shares (Symbol: UMRAX) Class I Shares (Symbol: UMRIX) Prospectus June 2, 2014 The U.S. Securities
More information1 Regional Bank Regional banks specialize in consumer and commercial products within one region of a country, such as a state or within a group of states. A regional bank is smaller than a bank that operates
More informationIIROC Staff Consultation - Concept Paper on the Feasibility of Portfolio Margining
Rules Notice Request for Comments Dealer Member Rules Contact: Jamie Bulnes Director, Member Regulation Policy (416) 943-6928 jbulnes@iiroc.ca Answerd Ramcharan Specialist, Member Regulation Policy (416)
More informationInsurance is an essential element in the operation of sophisticated national economies throughout the world today.
THE ROLE OF INSURANCE INTERMEDIARIES Introduction The importance of insurance in modern economies is unquestioned and has been recognized for centuries. Insurance is practically a necessity to business
More informationFIA Card Services, National Association. BA Credit Card Funding, LLC. BA Credit Card Trust
Prospectus Supplement dated July 26, 2007 to Prospectus dated July 17, 2007 FIA Card Services, National Association Sponsor, Servicer and Originator BA Credit Card Funding, LLC Transferor and Depositor
More informationHow To Get A Working Capital Loan From The Ex-Im Bank
How to Finance Export Receivables By Michael D. Farstad Export Finance Lender Table of Contents New Products Working Capital Supply Chain Finance Guarantee Program Global Credit Express Loan Guarantee
More informationConsolidated Statement of Financial Condition June 30, 2015
Consolidated Statement of Financial Condition June 30, 2015 Goldman, Sachs & Co. Established 1869 Consolidated Statement of Financial Condition INDEX Page No. Consolidated Statement of Financial Condition...
More informationHelping businesses manage risks and opportunities. Since 1893. Accounts Receivable Management Solutions from Euler Hermes ACI
Helping businesses manage risks and opportunities. Since 1893. Accounts Receivable Management Solutions from About Commercial Credit Protection Trade Finance Enhancement Buyer Risk Assessment & Monitoring
More informationArticle from: Reinsurance News. February 2010 Issue 67
Article from: Reinsurance News February 2010 Issue 67 Life Settlements A Window Of Opportunity For The Life Insurance Industry? By Michael Shumrak Michael Shumrak, FSA, MAAA, FCA, is president of Shumrak
More informationCommercial paper collateralized by a pool of loans, leases, receivables, or structured credit products. Asset-backed commercial paper (ABCP)
GLOSSARY Asset-backed commercial paper (ABCP) Asset-backed security (ABS) Asset-backed securities index (ABX) Basel II Call (put) option Carry trade Collateralized debt obligation (CDO) Collateralized
More informationVolatility: A Brief Overview
The Benefits of Systematically Selling Volatility July 2014 By Jeremy Berman Justin Frankel Co-Portfolio Managers of the RiverPark Structural Alpha Fund Abstract: A strategy of systematically selling volatility
More informationSpecialty Insurance Where Are We Headed?
2013 PLUS D&O Symposium Specialty Insurance Where Are We Headed? David Cash Endurance Specialty New York - February 6-7, 2013 Keynote Outline 1. Who are the Specialty Companies? 2. Economic drivers for
More informationNOTE ON LOAN CAPITAL MARKETS
The structure and use of loan products Most businesses use one or more loan products. A company may have a syndicated loan, backstop, line of credit, standby letter of credit, bridge loan, mortgage, or
More informationF INANCIAL S TATEMENTS. Brazos Student Finance Corporation Year Ended June 30, 2014 With Independent Auditors Report
F INANCIAL S TATEMENTS Brazos Student Finance Corporation Year Ended June 30, 2014 With Independent Auditors Report Financial Statements Year Ended June 30, 2014 Contents Independent Auditors Report...1
More informationA Survey of SME Finance and the Emerging Alternatives for Access to Capital
A Survey of SME Finance and the Emerging Alternatives for Access to Capital Jim Faith Trade and Export Finance Online Global California December 3, 2014 2014 TEFO. All Rights Reserved Agenda Section 1:
More informationKansas Health Policy Authority Small Business Health Insurance Steering Committee
How Health Coverage Works: Coverage Delivery, Risk Assessment, and Regulation The following summarizes the document How Private Health Coverage Works: A Primer 2008 Update published by the Kaiser Family
More informationToll Free: 1.888.XPORTSK (9767875) (in North America) Email: inquire@sasktrade.sk.ca www.sasktrade.sk.ca
These manuals are created as resource guides for members of Saskatchewan Trade and Export Partnership (STEP). For more information on these manuals please contact Saskatchewan Trade and Export Partnership
More informationUnderstanding Fixed Income
Understanding Fixed Income 2014 AMP Capital Investors Limited ABN 59 001 777 591 AFSL 232497 Understanding Fixed Income About fixed income at AMP Capital Our global presence helps us deliver outstanding
More informationAsset Backed Commercial Paper: A Primer
Asset Backed Commercial Paper: A Primer ABCP delivers several benefits to cash investors, enhanced diversification and attractive yields chief among them With diversification benefits, flexible terms,
More informationSEC Requests for Comment on Money Market Fund Reform Proposal
Skadden Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates SEC Requests for Comment on Money Market Fund Reform Proposal Comment requests that may be of particular interest to issuers of short-term
More informationThe Search for Yield Continues: A Re-introduction to Bank Loans
INSIGHTS The Search for Yield Continues: A Re-introduction to Bank Loans 203.621.1700 2013, Rocaton Investment Advisors, LLC Executive Summary With the Federal Reserve pledging to stick to its zero interest-rate
More informationPURPOSE FUNDS. Simplified Prospectus PURPOSE PREMIUM YIELD FUND. ETF shares, Series A shares and Series F shares
No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. PURPOSE FUNDS Simplified Prospectus PURPOSE PREMIUM YIELD FUND ETF shares, Series
More informationCapital Adequacy: Asset Risk Charge
Prudential Standard LPS 114 Capital Adequacy: Asset Risk Charge Objective and key requirements of this Prudential Standard This Prudential Standard requires a life company to maintain adequate capital
More informationSecuritizing Property Catastrophe Risk Sara Borden and Asani Sarkar
August 1996 Volume 2 Number 9 Securitizing Property Catastrophe Risk Sara Borden and Asani Sarkar The trading of property catastrophe risk using standard financial instruments such as options and bonds
More informationBrown Advisory Strategic Bond Fund Class/Ticker: Institutional Shares / (Not Available for Sale)
Summary Prospectus October 30, 2015 Brown Advisory Strategic Bond Fund Class/Ticker: Institutional Shares / (Not Available for Sale) Before you invest, you may want to review the Fund s Prospectus, which
More informationFinancial-Institutions Management. Solutions 6
Solutions 6 Chapter 25: Loan Sales 2. A bank has made a three-year $10 million loan that pays annual interest of 8 percent. The principal is due at the end of the third year. a. The bank is willing to
More informationgyb Growing your business TM
Private Company Services gyb Growing your business TM Volume 62 2010 Financing the future: Strategies for accessing capital Companies that want to grow, whether organically or by acquisition, need capital.
More informationHow To Understand The Concept Of Securitization
Asset Securitization 1 No securitization Mortgage borrowers Bank Investors 2 No securitization Consider a borrower that needs a bank loan to buy a house The bank lends the money in exchange of monthly
More informationCustomer Service & Communications Conference. Credit Insurance Overview. Jay Rose Euler Hermes
Customer Service & Communications Conference Credit Insurance Overview Jay Rose Euler Hermes Euler Hermes North America 119 years of experience, with a AA- S&P Rating and an A+ rating from AM Best Headquartered
More informationRECENT CHALLENGES IN CREDIT RISK MANAGEMENT
RECENT CHALLENGES IN CREDIT RISK MANAGEMENT 26 th March 2015 Page 1 Content: 1. Changes in the Risk Landscape since 2008/09 2. The importance of Credit Insurance 3. The importance of «Credit Management
More informationFrom PLI s Course Handbook Private Equity Acquisition Financing Summit 2006 #10725. Get 40% off this title right now by clicking here.
From PLI s Course Handbook Private Equity Acquisition Financing Summit 2006 #10725 Get 40% off this title right now by clicking here. 2 ASSET-BASED FINANCINGS FOR ACQUISITIONS COUNTING ON YOUR ASSETS Seth
More informationSingle Parent Captives: An Easy Approach to Managing Medical Stop Loss in the U.S.
Single Parent Captives: An Easy Approach to Managing Medical Stop Loss in the U.S. February 2, 2016, 11:10 a.m. - 12:10 p.m. Dave Arick Terry Richardson Debbie Liebeskind Dave Arick Terry Richardson Debbie
More informationReducing the amount of time that cash is tied up in holding stock 1. USING ROS TO FILE RETURNS AND MAKE TAX PAYMENTS
Fenero Guides for Business Development IMPROVING CASH FLOW Profitable business fail regularly due to poor cash flow. Finding a market and selling your goods or services is only half of the battle. A sales
More informationREADING 1. The Money Market. Timothy Q. Cook and Robert K. LaRoche
READING 1 The Money Market Timothy Q. Cook and Robert K. LaRoche The major purpose of financial markets is to transfer funds from lenders to borrowers. Financial market participants commonly distinguish
More informationRisk Management Examination Manual for Credit Card Activities
XV. LIQUIDITY Liquidity is the ability to fund future asset growth and/or pay liabilities, in a timely manner, at a reasonable cost. Banks use a variety of funding strategies to support credit card portfolios.
More informationInformation Paper Business Administration Committee Annual Operational Insurance Policy Renewals
M E T R O P O L I T A N W A S H I N G T O N A I R P O R T S A U T H O R I T Y Information Paper Business Administration Committee Annual Operational Insurance Policy Renewals November 2015 1 M E T R O
More informationFactoring. Turn your accounts receivable into immediate cash. www.creditbank.com
Factoring Turn your accounts receivable into immediate cash www.creditbank.com The 3 "S" Save time & money Streamline cash flow Secure cash collection What is Factoring? How beneficial is it for my business?
More informationMANAGING TRADING RISKS THROUGH THE ECONOMIC RECOVERY
Trade Credit Practice, UK MANAGING TRADING RISKS THROUGH THE ECONOMIC RECOVERY OCTOBER 2013 CONTENTS The trading landscape for UK based companies... 1 Payment default and bad debt... 2 Insurance benefits...
More informationTools for Mitigating Credit Risk in Foreign Exchange Transactions 1
Tools for Mitigating Credit Risk in Foreign Exchange Transactions November 2010 Introduction In November 2009, the Foreign Exchange Committee (FXC) and its Buy-Side Subcommittee released a paper that reviewed
More informationCommercial Paper (CP) De-Mystified
MAY 2013 Commercial Paper (CP) De-Mystified The Commercial Paper (CP) market has evolved over the last century, originating as a short-term funding mechanism for large non-financial corporations and developing
More informationMarket Linked Certificates of Deposit
Market Linked Certificates of Deposit This material was prepared by Wells Fargo Securities, LLC, a registered brokerdealer and separate non-bank affiliate of Wells Fargo & Company. This material is not
More information