Selling your open trade receivables to an SPV (special purpose vehicle) designed to attract alternative investors. Such investors may be investment banks, institutional investors or other parties.
Euler Hermes has been offering this solution in Germany for 10 years. Now we’re opening up this option to the Belgian market, too.
- Off-balance sheet
Your receivables are sold to the SPV. This increases your working capital in the short term. The receivables disappear from your balance sheet, improving your ratios and keeping you within your covenants.
- Credit enhancement
Euler Hermes has an AA rating, which means the SPV will also be rated AA. This has important benefits for investors in terms of capital allocation
By operating a senior and a junior tranche, you can offer 100% protection to investors for the receivables sold.
Euler Hermes’ starting point is debtor risk. We have been successfully screening businesses for over 90 years. Using an SPV gives you easier access to the capital markets. Unlike traditional lending, investors will not look at the financial position of your business.
(Test your customers’ financial health for free and without commitment)
- Setting up an SPV involves working with an intermediary, one or more investors and (if requested) a ratings agency. Euler Hermes takes care of covering the SPV’s underlying assets (i.e. the receivables), providing a bespoke policy for the investor and screening the receivables to ensure that they are eligible for inclusion.
- For investors, it is important that a certain amount of capital is made available that rotates with sufficient frequency for a healthy return to be achieved. This route can be profitable both for your business and for investors from a monthly outstanding balance of €25m.
Euler Hermes is a specialist in the analysis of B2B transactions. Making a good assessment of the quality of your customer portfolio is an important factor in maximizing the leverage effect. The first step in this process is to assess the quality of your portfolio on the basis of our internal rating system. We will be pleased to explain the results of our screening during a face-to-face meeting.