A Luxembourg Listed Rated Asset Backed Securitisation of Trade and Commodity Finance Transactions

  • Low default rates and high recovery rates

  • Exceptional risk-adjusted returns regardless of market conditions

  • Excellent floating rate returns protecting investors in a rising interest rate environment

  • Short tenor transactions with default rates significantly below other asset classes*

  • Payment risk in each transaction is credit enhanced by insurance or letters of credit protected by banks, each with a minimum credit rating of BBB+, further reducing risk of financial loss

  • A highly experienced team of trade and commodity finance experts with deep knowledge of the traditional, robust structuring and monitoring techniques which are no longer available at many banks, minimising transaction risks

* Source: International Chamber of Commerce Trade Register Report 2021

Underlying Transactions

  • Transactional Commodity Trade Finance

  • Borrowing Base Finance

  • Performance Risk Finance (Pre-Export, Prepayment Finance and Tolling Finance)

  • Receivables Purchase

Capital Deployment

SYNTHESIS is an issuer of asset backed notes. Notes proceeds are deployed to fund its activities as an alternative credit provider in the global trade and commodity finance market.

Notes bear a 3 year maturity. The underlying assets are short-dated, real economy trade and commodity finance transactions. Transactions are selected by SYNTHESIS to form a diverse portfolio. Transactions are compliant with strict selection criteria set by the notes prospectus and monitored by the credit ratings agency on a monthly basis and by Maples independent directors prior to signing the transaction documents.

A Highly experienced team selects the underlying portfolio assets monitored by an external advisory committee.

Portfolio Parameters

  • Strict concentration limits by counterparty, commodity, country and maturity, actively managed to ensure optimum diversification

  • Transaction tenors typically 90 days, maximum 180 days

  • Robust procedures and IT systems for active monitoring and control of all transactions

  • Self-liquidating transaction structures with security/title/control over one or more of commodities, contract rights, payment flows, collection accounts and other transaction assets

  • Investment grade offtakers (buyers of the commodity) or credit-enhanced through letters of credit, bank guarantees or trade credit insurance issued by financial institutions with a rating of BBB+ or above

  • Individual obligor exposure capped at US$ 30 million

  • Diversified across agricultural, metals, energy and other commodities

Opportunity

The trade finance funding gap has increased to US$1.7 trillion (WTO 2020 estimates)

Regulatory changes are driving banks away from commodity trade finance

Large infrastructure programmes are increasing demand for commodities

A genuine need for transparent and accountable alternative credit providers who adhere to their published lending criteria has emerged

Method

Focus on strategic global supply chains  and relying on a premium proprietary origination network

Loans with a short revolving tenor which are over-collateralised by liquid commodities

Receivables which are either investment grade or enhanced by bank instruments/credit insurance from institutions with a minimum credit rating of BBB+

Robust credit model and risk analysis, strict concentration limits, on-site due diligence and industry leading monitoring agents

USP

World-class team members

Multi-layered governance structure, with an experienced legal team of former “Magic Circle” senior partners involved from an early stage of the investment  process

External monitoring for compliance with the notes prospectus performed by ARC Ratings (monthly) and by Maples’ independent directors (before signing the transaction documents)

Cutting edge IT systems digitise the operating model, minimising fraud and operational risk