Siemens and SecDebt target invoice debt deals
Siemens Financial Services (SFS) has teamed up with UK securitization boutique SecDebt to try to bring SMEs and mid-cap companies to the capital markets. SFS and SecDebt reckon that between them they can cut the cost of issuing bonds backed by invoice debt in trade receivables-style deals.
?Treasurers who are managing maybe £10 million of debt on their balance sheet at any one time fall short of the investment banks? radar screen for inclusion in pools of debt to back capital markets issues,? says SecDebt CEO Alastair Malcolm. ?Securitization has been around for many years but plateaus at quite a complex level.?
This is especially true of trade receivables deals, which have been off limits to smaller borrowers because invoice debt is a cumbersome and expensive underlying asset to manage. Sales ledgers contain so many possible discrepancies that day-to-day monitoring of them is vital.
Under its new scheme, SFS buys the ledger and puts it on its own balance sheet. For smaller invoice ledgers, SFS might finance the whole book. With larger invoice pools split into tranches, SFS may act as a partial investor.