Trade receivables financings take advantage of a number of legal mechanisms in order to achieve particular effects. An insolvency remote sale, dominion over collections and ensuring receivables can be collected directly are some of the key features structures seek to include. The cross-border nature of trade receivables financings also often adds to the complexity, with multiple legal systems needing to be taken into consideration.
Recently, a number of these techniques historically adopted for trade receivables financings have been employed in respect of the financing of new asset classes – such as trade finance assets – as well as undergoing an evolution in some cases – for instance to finance trade receivables originated through online peer to peer platforms and refinance supply chain finance exposures.
In this briefing we look at these asset classes and new structures and how the well trodden legal approaches used in traditional trade receivables financings are being used and developed to put together transactions to fund them.