IIG Trade Finance announced it has completed a pioneering securitization of non-bank Latin America-based trade finance loans. The resulting Cayman Islands-based company, Trade Finance Funding I, Ltd., has issued $220 million of Collateralized Loan Obligations (CLO) that were structured, arranged and placed by Deutsche Bank Securities, Inc.and will be managed by The International Investment Group L.L.C., an SEC Registered Investment Advisor.
Trade Finance Funding I, Ltd. which focuses on the Latin American agriculture and soft commodity industries, provides unique investment opportunities in trade finance, as well as additional liquidity to the commodity trade finance market. Trade finance is an asset class that has been traditionally dominated by large, international banks and other financial institutions.
”The CLO space is a natural extension of our trade finance business and we are very happy to be working with the Deutsche Bank team on this new securitization product,” said Martin Silver, Co-Managing Partner and Co-Founder of IIG Trade Finance. “This offering not only represents a milestone for us but also creates an important new source of trade finance funds for the traditionally underserved business segment of small and medium-size businesses.”
IIG Trade Finance was established to focus and capitalize on trade finance opportunities in the marketplace. It expects the Trade Finance Funding I, Ltd. offering to be the first of numerous issuances as it explores additional trade finance investment opportunities.
"Trade finance continues to be an extremely attractive investment opportunity as banks, historically the primary lenders for global exports, have not been able to fulfill the growing demand, especially from small and medium-size exporters in the emerging markets,” said IIG Trade Finance Co-Managing Partner and Co-founder David Hu.
Trade Finance Funding I, Ltd.’s capital structure is comprised of the following: $110 million Class A Senior Secured Floating Rate Notes, $77 million Class B Secured Fixed Rate Notes and $33 million of Income Notes. The A and B Notes are primarily backed by short-term trade finance loan advances to small and medium-size enterprises engaged in the processing/export of physical commodities, such as cotton, frozen beef, frozen shrimp/seafood, powdered milk and soybean meal. These financings, provided through various trade finance structures, allow the obligors to fund their operations and cover the gap between payments to suppliers and receipt of payments from the ultimate buyers.
IIG Trade Finance is the service mark of IIG Trade Finance LLC. It is a leader in the trade finance industry, dedicated to meeting the special working capital needs of small and medium-size merchants, traders and processors in both the domestic and international markets, with a focus on Latin America. IIG Trade Finance offers a unique range of financing solutions that cover the entire supply chain and trade cycle, from the purchase of raw materials to the sale of processed goods.