Institutional investors for sell-down of trade finance assets
Banks have been selling trade finance assets among themselves for years. With the advent of new Basel guidelines regarding balance-sheet and liquidity ratios, some bank investors might focus on using their limited resources for direct client origination vis-à-vis secondary market purchases. In addition, some bank investors have limited USD liquidity, which might in-turn reduce their secondary market purchases, thus, aggravating the situation further.
While, on the other hand, institutional investors have surplus cash, especially on the shorter-end of the curve, and are looking for various avenues for deployment. Currently, a portion of the surplus cash is lying idle in bank deposits earning abysmal returns (especially under new Basel guidelines that penalises deposits from financial services industry, which are not considered LCR friendly deposits).
Pinnacle Trade Finance is focused on helping banks to continue meeting their client requirements and boosting trade revenues via the ‘originate-to-distribute’ strategy. The team can contribute in the following aspects:
1. Help banks access institutional investors regarding sell-down of their trade finance assets
2. Relook at bank’s existing sell-down structures on ‘funded’ true-sale basis, with an objective to undertake higher volumes
3. Introduce new legal structures that are attractive for institutional investors
4. Tie-up with potential technology platforms to automate the end-to-end execution of trade asset sales