Case Study

"ARTFINE ADVISORY LLP STRUCTURES COUNTRY’S FIRST COVERED INSTRUMENT IN SUPPLYCHAIN"

  • Centrum Financial Services Limited (CFSL) has successfully issued India’s first covered instrument involving a supply chain portfolio in the form of a Commercial Paper (CP) for the tenor of 6 months. The CP investors shall have the benefit of dual recourse. While the primary obligation to repay lies with the Issuer, the Investors shall have an additional recourse on the bankruptcy remote Cover Pool assets (i.e. payments due from a AAA rated Indian entity against invoices raised by its vendors).
  • This ensures that the instrument carries the highest credit rating on the short-term scale. Both ICRA and CARE have rated the instrument A1+(SO) signifying highest short-term rating.
  • Artfine Advisory is advisor to CFSL for this transaction which included rating, legal & compliance advice.


Centrum acquires L&T Finance Supply Chain Business

  • L&T Finance had offered to sell its supply chain finance business to Centrum Financial Services
  • Outstanding portfolio of loans to vendors and dealers of INR 6.50 Billion transferred on as of Dec 31, 2018
  • Portfolio offers a client base of over 700 vendors and dealers with good history with leading Anchors – L&T, Ingram and Syska


Our Scope

  • Advising Centrum Finance (CFSL) on the business buyout
  • Translating Superior Quality receivables into improved borrower's rating

Key Take Away

  • First covered commercial paper in the country
  • Improvement in overall portfolio yield

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