Securitization of a Commercial Transaction
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 computer-implemented method comprising, by a trade system:
receiving a purchase order from a buyer;
receiving approval of the purchase order from a vendor, the approval indicating the vendor agrees to terms of the purchase order;
receiving an indication of potential credit exposure of the buyer from a credit protection syndication;
determining, based upon one or more transactions between the buyer and the vendor, that payment is due to the vendor based upon completion of an obligation set forth in the purchase order by the vendor;
receiving a payment from the buyer;
delaying delivery of the payment received from the buyer to the vendor based upon a net-term set forth in the purchase order;
determining an entitlement right to receive the payment received from the buyer based at least in part upon the indication of potential credit exposure of the buyer; and
transferring the entitlement right to receive the payment received from the buyer to a securitization SPV.
2 . The computer-implemented method of claim 1 , wherein the credit protection syndication is a special purpose vehicle (SPV).
3 . The computer-implemented method of claim 1 , further comprising:
transferring a plurality of entitlements rights to receive a plurality of payments received from a plurality of buyers to the securitizataion SPV.
4 . A computerized system configured to perform the method of claim 1 .