CAT Financial Products and CAT Growth are launching a platform that enables institutional investors access to securitized corporate loans from selected SMEs.
While CAT Growth identifies and manages potential companies and enables direct investments with a focus on growth financing and succession planning, CAT Financial Products is responsible for the securitization of the corporate loans. An audit firm provides the valuation and an independent rating agency issues the ratings. The first project has a volume of up to CHF 30 million and will be completed in December 2018.
«Our platform gives institutional investors direct access to corporate loans, an asset class that is suitable for adding to the bond allocation and which is characterised by its low correlation to traditional markets,“
Giuliano Glocker, CEO of CAT Financial Products reports.
CAT Growth mainly identifies companies in the DACH region (Germany, Austria and Switzerland) seeking growth capital.
Martin Ziehbrunner, CEO CAT Growth:
„The focus is on established and profitable companies from different industries, which are well positioned in the market and have innovative products and clear USPs“.
In addition, certain bonds are secured by real estate, blocks of shares in third-party companies or other assets. Alongside the unique setup, the strict criteria and the active management are intended to achieve added value for investors.
The Advisory Board of CAT Growth consists of experienced entrepreneurs from the industry, who have an international track record in a wide variety of medium-sized and large companies. This expertise will be incorporated into the selection, due diligence and accompanying processes, to ensure an optimal selection of high quality corporate loans. In addition, each company and the corresponding collateral are evaluated by an auditor and it is possible to have a rating from an independent and FINMA-approved rating company.
Securitization with Swiss ISIN and a digital marketplace provide liquidity
The loans are securitized via the issuing platform of CAT Financial Products. The investment products are categorized as structured products with reference entities in the form of private placements with a Swiss ISIN and a swiss paying agent. The transparent setup at low costs and the flexible structuring options enable an efficient securitization of corporate loans. The products are monitored and analysed via the online platform of CAT Financial Products‘.
An access for institutional investors is intended to provide a digital marketplace and thus liquidity in the daily secondary market. For a volume starting at one million Swiss Francs, corporate loans are launched via the platform. A special AMC (Actively Managed Certificate) will be launched for smaller transactions. This AMC invests directly in smaller loans and thus offers access to a diversified portfolio. It will be issued in CHF and is suitable for qualified investors. A special feature of the AMC is the possibility of coupon payments, financed by redemptions or coupons in the underlyings loans.
First project this year: 3-year maturity with 3% p.a. in CHF, secured by Swiss property
„After a year of development, we are looking forward to the launch of the new platform for corporate loans; the first project will be issued before Christmas. It is a 3-year credit linked note with a coupon of 3.00% per annum. The capital of up to CHF 30 million will be backed by a first-class Swiss property and the note can be repaid early; partial repayments are also possible. Further exciting projects will follow in January 2019, for example a succession solution for an IT SME will be financed by a company loan.“
The platform is initially accessible for clients of CAT Financial Products and CAT Growth and will be rolled out nationally to qualified investors in 2019.
Complete integration of the processes without issuer risk of a bank
The securitization and issuance platform is based on off-balance-sheet Special Purpose Vehicles (SPVs) and covers the entire process chain from consulting, structuring, securitization and daily valuation up to the booking into the customer’s custody account. The transparent setup, the maximum security as well as the possibility to freely determine all involved parties offer the highest flexibility and cost efficiency.
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