2.07 What is a Cash-to-Cash life-cycle?

The Cash-to-Cash [CtC] measure of a business measures the number of days needed to fund a single trade life-cycle. The measurement starts on the first day it pays for something/someone to fullfil a single order. And ends when the completed order is paid for in full

2.23 How does an IDF Buy-Out work?

Many Originators with Invoice Discounting or Factoring [IDF] ask Credebt Exchange® to Buy-Out their contract so that they can completely dispense with their current provider. This is a simple and straightforward process where Credebt Exchange® buys the complete ‘book’ of debt from the IDF provider in a single transaction. As the new owners of the book, the Originator and Credebt Exchange® work together to get all the outstanding invoices paid in full. During the transition period from the previous IDF provider to Credebt Exchange® the Originator uses the Revolving Market that works and ‘behaves’ very much like an IDF provider’s service. Using the IDF Buy-Out should have little or no impact on the Originator’s day-to-day operations

2.22 Can I also use invoice discounting or factoring [IDF]?

Contracts with Invoice Discounting & Factoring [IDF] companies are very strict but from comments made by some providers, once you make them aware that you are using Credebt Exchange®, there should not be an issue. Before deciding to trade on the Exchange, you should talk to your account manager and ask for clear advice on this, before proceeding further (see below)

2.20 How long does it take to sell an ETR?

As an Originator with a confirmed RPA Offer, your ETR are purchased before 1.00pm (if this is a business day). Originators prefer the Revolving Market because it means that funds are ‘always there’, meaning that they have a reliable source of low cost capital

2.19 What is a Basis Point [BPS]?

A Basis Point [BPS] is 0.01% (1/100th of a percent) or 0.0001 in decimal form. BPS are used on the Exchange to improve trading speed using one-click Spread (i.e. the difference between the Offer and the Bid)

2.18 What are the different ETR Types?

The true sale of an ETR occurs the moment that Credebt Exchange® transfers payment to the Originator. For example, if the payment transfer is EUR 9,900 on an Outright ETR with a Face Value of EUR 10,000, the moment that Credebt Exchange® transfers the Purchase Price i.e. EUR 9,000 (less processing fees), the sale occurs. TomNext payment is transferred electronically to the Originator’s Bank account once the ETR is traded (i.e. the trade closes). There are five types of ETR:

  • Advance ETR

    This is a Spot Market fixed price ETR trade where the Originator/Agent offers ‘Payment on Demand’ to its supplier in exchange for an early payment discount (e.g. 2-3.000%). Transfer of the Purchase Payment (less Trade Commission) is made to the supplier and the Originator/Agent owes the Face Value of the invoice paid to Credebt Exchange®

    When to use this

    Select this type when trading and selling ETR on an ad hoc/infrequent or revolving basis. To view trading activities, you must apply online.

  • Outright ETR

    This is a Spot Market fixed price ETR trade where the Originator/Agent sets the Discount percentage amount. Transfer of the Purchase Payment (less Trade Commission) is made to the Originator/Agent, ownership of the ETR transfers completely to Credebt Exchange® and there is no Reserve refund. Responsibility for the collection of the ETR remains with the Originator/Agent and if the ETR is paid on or before the Expected Date

    When to use this

    Select this type when trading and selling ETR on an ad hoc/infrequent basis. To view trading activities, you must apply online.

  • Managed ETR

    This is a Spot Market variable price, single ETR trade where the Originator/Agent sets the Discount monthly percentage. When Credebt Exchange® makes a payment (less the Reserve and Trade Commission) is made to the Originator/Agent and ownership of the ETR transfers completely to the Exchange. Responsibility for the collection of the ETR remains with the Originator/Agent and if the ETR is paid in less than 180 days, the Originator receives a Reserve refund

    When to use this

    Select this type when trading on a regular basis. To view trading activities, you must apply online.

  • Performance ETR

    This is a Spot Market variable price, single ETR trade where the Originator/Agent sets the Discount monthly percentage and the Expected Date. When Credebt Exchange® makes a payment (less the Reserve and Trade Commission) is made to the Originator/Agent and ownership of the ETR transfers completely to the Exchange. Responsibility for the collection of the ETR remains with the Originator/Agent and if the ETR is paid on or before the Expected Date, the Originator receives a Reserve refund. If it is not paid before the Expected Date, the Originator/Agent loses the Reserve and no further payment is due

    When to use this

    Performance ETR should attract the best bids, but you should only select this type when you are absolutely sure that the ETR will be paid on, or before, the Expected date (remember, if it is paid even one day late, you lose the entire Reserve). apply online.

  • Revolving ETR

    A Revolving ETR is a Revolving Market variable price, multiple ETR trades where the Originator/Agent sets the Discount Percentage and commits to provide a ‘block’ of Advance, Outright, Managed or Performance ETR with a specific total value, over a fixed period of time. Credebt Exchange® agrees to pay for every ETR at the same Discount rate. Ownership of all the ETR transfers completely to the Exchange. Responsibility for the collection of the ETR remains with the Originator/Agent. With exception of an Outright Sale, payment of the Reserve to the Originator shall be deferred until, and is conditional upon, all the relevant Traded ETR being Settled on or prior to their Maximum Maturity Dates. If such Traded ETR are Settled on or prior to their Maximum Maturity Dates then all Reserves shall be payable by Credebt Exchange® upon each Reserve Payment Date. In the case of an Outright ETR, payment of the Reserve to the Originator shall be deferred until, and is conditional upon, all the relevant Traded ETR being Settled on or prior to their Expected Datse, the Originator receives a Reserve refund. When considering the Advance ETR, this is a loan from Credebt Exchange® to the Originator and must be repaid in full

    When to use this

    After you are an established Member of the Exchange, the Revolving ETR option will be enabled on your account and provide access to the Revolving Market option that can be used to replace or compliment traditional bank lending/credit facilities. To view the Trade Floor prices, understand trading techniques and strategies and to view trading activities on the Trade Floor, you must apply online.

2.17 What are the difference Markets?

The Spot Market offers ‘as you need it’, intelligent finance whilst the Revolving Market is a revolving/recurring market that is popular with almost all Convertibill™ users, as explained below:

  • Spot Market

    The Originator/Agent uses the Exchange as a Spot Market and offers to trade their ETR ‘one-at-a-time’ as an Advance, Outright , Managed, or Performance ETR. To view trading activities, you must apply online.

    Note:- the Originator Registration fee is non-refundable.

  • Revolving Market

    In the Revolving Market, Originators agree to sell a specific ‘block’ of ETR over a certain period of time and Credebt Exchange® agrees to purchase this block of ETR on a recurring/revolving basis. At all times, Credebt Exchange® must be in possession of ETR that have an equal, or greater, Face Value than the amount paid to the Originator/Agent. To view trading activities, you must apply online.

    Note:- the Originator Registration fee is non-refundable.

2.16 What is an ‘Offer’ or a ‘Bid’?

In an Outright ETR, the Offer is the fixed value amount that the Originator/Agent offers an ETR for sale on the Exchange. In RSA trades of either Performance ETR, or Managed ETR, an Offer is the fixed monthly percentage Discount of the Face Value of an ETR that the Originator/Agent offers for sale on the Exchange. The Investor makes a Bid against the Offer and if the Bid equals the Offer, the trade closes and becomes a Traded ETR

2.15 How is the Reserve calculated?

With exception of Outright ETR trades (because the Sell Rate is fixed, regardless of when it is Settled), the Reserve is a percentage that is calculated on a daily basis using the Trans-European Automated Real-time Gross Settlement Express Transfer 2 [TARGET2] system from the European System of Central Banks using the Euroclear method of 1/360 to define 1 day, or part thereof. The number of days is calculated by subtracting the Issue Date from the Expected Date