2.14 What is a ‘Reserve’?

The Reserve is a sum of money, related to the Face Value of the ETR, that is held by Credebt Exchange® to ensure the Originator/Agent gets the ETR Settled (i.e. paid in full) efficiently.

2.13 What is the Issue Date of an ETR?

When an invoice/ETR is issued it has a date on it, this is the Issue Date. The issue date is very important because all calculations are based using this date and the Expected Date. For example, if an invoice dated 2016-01-01 is traded on 2016-02-01 and is not settled until 2016-03-31 then it will be outstanding 90 days (i.e. not 59 days)

2.12 Is the Expected Date important?

Yes. It is very important for two reasons that affect:

  • SettlementIf an ETR is not Settled (i.e. paid in full by the debtor) within 15 calendar days of the Expected Date, Credebt Exchange® will initiate its Collections Policy. The Collections Policy stipulates that if the ETR is not Settled within 15 days of the Expected Date, the Credebt Exchange® Collections Team may initiate direct contact with the debtor to ensure prompt payment. If the payment is not received within 30 Days of the Expected Date,  Credebt Exchange® regards the payment  as distressed and passes  the ETR for collection by a third-party, debt collections agency. Under the terms of the Master Agreement, Credebt Exchange® will use all necessary practices, including legal remedy, to ensure collection. To avoid any damage to the Originator’s reputation, it is advised that all ETR are collected on, or close to, the Expected Date
  • Cost of FundsThe Expected Date affects Reserve payments and Originators are encouraged not to over estimate the Expected Date because this increases the Discount. In the case of Outright ETR trades, payment of the Reserve only occurs if the ETR is Settled on, or before, the Expected Date. Over estimating is ‘bad practice’ and should be avoided to ensure the best value, low cost capital

2.10 How is the Discount Percentage Calculated?

With exception of Outright ETR trades like fixed credebt® facilities, the Discount Percentage 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. Asset ETR/a-ETR Finance uses periodic repayments where the calculation uses a single, same amount payment, at the end of each period on a fixed rate percentage, based on a fixed number of compounding periods and using TARGET2. Variable credebt® facilities like b-ETR, c-ETR or d-ETR Trade Finance, applies the Discount Rate every TARGET2 day where the calculation uses a fixed rate percentage, based on the number of days the ETR remains outstanding.

2.21 What is the ‘Discount’/d-ETR Sell Rate?

In the case of an Outright ETR, the Discount or d-ETR Sell Rate is a fixed value amount. In the case of RSA Trades of either Performance ETR or Managed ETR, the d-ETR Sell Rate is a Discount Percentage monthly charge that is deducted from the Face Value of the ETR for each month that it is outstanding. This Discount Percentage monthly charge applies to both d-ETR and c-ETR. An independent third-party monitors and reconciles all Bank transactions to ensure all Discounts are correctly applied and to protect the interests of all Members of the Exchange

2.06 How does RSA trading work?

RSA trading is the most common form of trading on the Exchange and occurs on a discounted basis. There are the four simple steps required to access your required Convertibill® intelligent finance:

How to become an Originator on the Exchange

  • Contact Us

    Whether you submit your enquiry online, call us on +353 1 685-3600 or email us, the initial information we need is straightforward (see the application form for further details)

  • RPA Offer

    From the information you provide in your initial application, we will issue a Provisional Revolving ETR Purchase Agreement [RPA] Offer. This is a single offer document that will specify the total finance available to you. Once you confirm your acceptance, you are invited to register

  • Complete Application

    After user registration, you enter your organisation details, followed by the debtor details and creditor details provided in your original application. Depending on how you wish to operate your account, you can enter all your debtors/creditors or just a handful to start with, so that you can learn how the Credebt Exchange® trading system works

  • RPA Confirmation

    The Provisional RPA Offer becomes a Formal RPA as soon as your first debtor/creditor is approved

2.08 What is a Revolving Sale Agreement [RSA]?

A Revolving Sale Agreement [RSA] trade is where the Originator agrees to sell invoices/ETR on a recurring/revolving basis over a fixed period of time (e.g. 1-Year). As this RSA is a selling transaction, Credebt Exchange® issues a Revolving Purchase Agreement [RPA] offer as a buying transaction that matches the RSA. If the working capital Requirement of a business is EUR 0.5m and the average time it takes for debtors to pay their invoices is 90-days, then the Originator will agree an RSA with Credebt Exchange® for EUR 2.0m per annum (i.e. EUR 0.5m x 4 = EUR 2.0m)

2.05 What is an ETR ‘Face Value’?

The ‘Face Value’ of an ETR is the total value of the ETR including all taxes, VAT, delivery charges, etc. It is the total amount that must be paid for the ETR to be regarded as Settled or ‘paid in full’

2.04 What is an Originator?

Any organisation seeking to sell its ETR on the Exchange, will first submit an enquiry for consideration to be an approved Originator on Credebt Exchange®