Securitization of a commercial transaction
View Patent ↗A method and apparatus for generating a tradable security includes confirming a vendor's compliance with predefined terms of a commercial transaction, such that a buyer is obligated to make a due payment. The method and apparatus further includes electronically rating a financial commitment relating to a receivable account for the commercial transaction. This receivable account is rated based on conditions and factors known to a system facilitating the commercial transaction. Based on the ability for the financial commitment to be rated, a financial exchange is operative to transfer entitlement rights to monies due under the receivable account where the terms for the transfer of the entitlement rights are based at least in part on the electronic rating. Thereby, receivable accounts to commercial transactions may be tradable by one or more investors as properly rated investment.
1. A method, within an electronic trade system, comprising:
electronically rating a financial commitment relating to at least one of a plurality of accounts receivable and receiving, from a securitization special purpose vehicle (SPV), an offer to purchase the at least one account receivable subsequent to compliance with a plurality of terms by a vendor;
standardizing the plurality of accounts receivable; and
transferring one or more of the plurality of accounts receivable to an investor based at least in part on the rating of the financial commitment relating to the account receivable.
2. The method of claim 1 , wherein the financial commitment represents an amount due to the vendor subsequent to compliance with the plurality of terms by the vendor.
3. The method of claim 1 , wherein the standardizing the plurality of account receivables is based on non-public information obtained from the electronic trade system.
4. A method comprising:
for each of a plurality of commercial transactions occurring within an electronic trade system:
electronically rating a financial commitment relating to an account receivable held by the vendor, the commitment representing an amount due to the vendor subsequent to compliance with terms of the commercial transaction by the vendor;
receiving, from a securitization special purpose vehicle (SPV), an offer to purchase the receivable subsequent to compliance with the terms by the vendor;
confirming, by the electronic trade system, compliance by a vendor that is a party to the commercial transaction with terms of the commercial transaction; and
subsequent to said step of confirming, transferring ownership of the receivable to the SPV;
using non-public information obtained from the electronic trade system to standardize the plurality of accounts receivable; and
transferring one or more of the accounts receivable through the electronic trade system to an investor.
5. The method of claim 4 , further comprising the step of rating each of the plurality of accounts receivable.
6. The method of claim 5 , further comprising grouping similarly-rated accounts prior to transferring the one or more accounts to the investor.
7. The method of claim 4 , wherein the one or more accounts is transferred to the investor at a price lower than the value of the accounts, prior to a time when the accounts are due to the associated vendors.
8. The method of claim 4 , further comprising the step of providing liquidity from a financial institution to the SPV through the electronic trade system subsequent to a failure by one or more buyers to make a payment required by the terms of the commercial transactions.
9. The method of claim 4 , further comprising the step of, for one or more of the commercial transactions, providing credit protection obtained by the vendor to the SPV through the electronic trade system.