Helping companies use their trade receivables efficiently
Credit insurance supporting structured finance transactions based on trade receivables.
Superior documentation links Excess of Loss cover directly to funding source and provides contract certainty
Aimed at larger corporates seeking to improve cost, the advance rate and availability of finance secured upon pools of trade receivables
Global Finance Manager provides transaction visibility at a granular level
UK and multinational companies with significant receivables assets seeking efficient access to working capital. Turnover between $250m and $2bn.
Trade Finance from AIG helps companies use their trade receivables efficiently to raise funds from the capital markets through a wide range of leading domestic and international banks.
This product provides a solution for companies and banks to many of today’s perceived inefficiencies in trade finance and traditional trade credit insurance. In conjunction with our Global Finance Manager system, it can help to address risk management issues for companies and banks and responds to many difficulties of today’s credit-constrained world.
Trade financing works by smoothly combining securitisation techniques, technology and trade credit insurance. By tapping into the wholesale markets, businesses can benefit from longer term savings in their cost of funds. In addition, businesses can also get higher advance rates against their receivables portfolio, raising more capital for expansion, investment or other purposes.
Banks support this lending approach, as it helps them reduce their internal costs and capital allocation while helping meet their Basel III regulations.
Finance is usually based on the sale of the client’s receivables to a bank or other funder on a regular basis (weekly, fortnightly or monthly). Normally there is no need for the client’s buyers to be notified of the sale of the receivables or to change their existing payment arrangements.
The client then receives payment of a purchase price (based on the insurance policy reserves agreed with AIG) for the receivables and continues to deal with its buyers for collections and recoveries. Collections made from the client's buyers enable the finance and service charges to be met.
The transaction is supported by a specialist trade credit insurance policy from AIG.
Trade Finance is provided to our clients by AIG Trade Finance Limited, a subsidiary of AIG Europe Limited.