WHAT WE DO
Single corporate receivables programs
We’re often mandated by a bank, asset manager or insurer to operate a funding program
We’re often mandated by a bank, asset manager or insurer to operate a funding program
Much of Aronova’s business is where a bank, asset manager or insurer mandates Aronova to deliver and securely operate an individual corporate funding program.
This can be due to a whole host of reasons, including the seller having a high volume of invoices or debtor accounts, the program needing to set global debtor credit limits, the program having certain complexities, or simply because the funder or insurer lacks the required in-house infrastructure or expertise to run the program.
In these cases, the bank or asset manager will have originated the transaction and if the transaction is insured, the bank will have arranged insurance with its preferred insurer. Aronova is mandated somewhere along the lead-up to signature of a Term Sheet and Aronova will need to establish a services agreement directly with the corporate (seller).
Our modular approach means we can tailor our services to specific program needs
On or off-balance sheet, rated or not rated, insured or uninsured, our involvement and the structure of services we provide varies from one program to another. But will generally include:
- Regular collection and processing of receivables data from the seller and loan data from the funder
- If the transaction is insured, interaction with the insurer and management of debtor credit limits
- Application of required eligibility testing, stop purchase, repurchases, performance triggers and S&P reserving (if used)
- Establishment of collateral pools and, where necessary, the on-sell of receivables from one pool or SPV to another
- Optimisation of which receivables to sell, borrowing base tests and reporting
- Cash manager instructions for funds transfers to the seller
- Provision of online access to The Funding Point for program monitoring and visibility
Invoice true-sale with one or many collateral pools
Invoice true-sale with one or many collateral pools
Many of Aronova’s single corporate programs are off-balance sheet receivables purchase transactions. These usually involve the true-sale of receivables to one or more SPVs or funding vehicles and the dynamic calculation of an invoice purchase price.
Other programs might have limited recourse back to the seller and may require the management of fees and invoice repurchases. These are often structured as on-balance sheet transactions with an Advance Purchase Price (APP) paid on invoice sale, and a Deferred Purchase Price (DPP) paid on invoice repayment. On-balance sheet programs may also include a concept of offsets for the recovery of dilutions, repurchases and program fees.
In all cases, the corporate remains responsible for cash collections, credit control, the prompt allocation of cash and credits to open invoices and the prompt updating of its corporate accounting system.