In January 2017, Factor@Work (an Italy based portfolio manager) has completed the purchase of 5 million EUR of corporate receivables through a securitization vehicle. All the assets have been originated by Workinvoice, an Italian invoice trading platform.
A first for Italy’s securitisation market, the deal was arranged by Workinvoice, while Zenith Service acted as SPV provider and master servicer. The receivables being securitised were sold by Italian small and medium sized enterprises (‘SMEs’) through Workinvoice’s invoice trading platform, and were originated by Workinvoice.
As part of this new securitisation model, Italian SMEs utilize the platform offered by Workinvoice to offer for sale some of their trade receivables held against their clients; the investor may then enter into a credit insurance agreement with an insurance company.
Workinvoice states that based on the receivables that have a low default risk and a high turnover, invoices securitization is a multistep process of providing a financing source by transforming illiquid assets into securities, resulting in the liquidation of the assets and the creation of new financing sources.
Commenting on the transaction, CEO of Workinvoice, Matteo Tarroni, said: “We are pleased to continue developing new sources of financing for Italian SMEs, particularly in this instance on a market first transaction, demonstrating the capability of the firm’s origination model and our role as one of the leading marketplaces in the fast growing FinTech sector.”
While small in size compared to securitization done by US marketplaces, it is a significant step in exploring the opportunities in the Italian market. For a general introdution into securitization and its role in p2 lending read this article by Peter Renton on Lend Academy.
Approximately 40 million euros of invoices have been so far funded by investors through Workinvoice.