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 comprising:
generating, by a special purpose vehicle (SPV), a security-based tradable for each of a plurality of commercial transactions occurring within an electronic trade system, the security-based tradable being based upon a financial commitment relating to an account receivable held by a vendor, the commitment representing an amount due to the vendor subsequent to compliance with terms of the commercial transaction by the vendor;
providing, by the SPV, an offer to purchase the account receivable subsequent to compliance with the terms by the vendor; and
subsequent to confirmation of compliance by the vendor by the electronic trade system, receiving ownership of the account receivable by the SPV.
2. The method of claim 1 , further comprising the step of receiving a rating of each of the plurality of accounts receivable.
3. The method of claim 2 , further comprising grouping similarly-rated accounts receivable.
4. The method of claim 1 , wherein the one or more accounts receivable is transferred to the SPV at a price lower than the value of the accounts, prior to a time when the one or more accounts receivable are due to the associated vendors.
5. The method of claim 1 , further comprising receiving liquidity from a financial institution by 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.
6. The method of claim 1 , further comprising the step of, for one or more of the commercial transactions, receiving, by the SPV, credit protection obtained by the vendor through the electronic trade system.
7. A system comprising:
one or more processors; and
a computer-readable storage medium storing a plurality of instructions that cause the one or more processors to:
generate a security-based tradable for each of a plurality of commercial transactions occurring within an electronic trade system, the security-based tradable being based upon a financial commitment relating to an account receivable held by a vendor, the commitment representing an amount due to the vendor subsequent to compliance with terms of the commercial transaction by the vendor;
provide an offer to purchase the account receivable subsequent to compliance with the terms by the vendor; and
subsequent to confirmation of compliance by the vendor by the electronic trade system, receiving ownership of the account receivable.
8. The system of claim 7 , said instructions further causing the one or more processor to receive rating of each of the plurality of accounts receivable.
9. The system of claim 8 , said instructions further causing the one or more processors to group similarly-rated accounts receivable.
10. The system of claim 7 , wherein the one or more accounts receivable is transferred at a price lower than the value of the accounts, prior to a time when the one or more accounts receivable are due to the associated vendors.
11. The system of claim 7 , said instructions further causing the one or more processors to receive liquidity from a financial institution 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.
12. The system of claim 7 , said instructions further causing the processor to receive, for one or more of the commercial transactions, credit protection obtained by the vendor through the electronic trade system.