Commodity Trade Finance Asset Buyers
Providing access to self-liquidating commodity trade receivable repayment risk without traditional exposure to commodity price volatility.
Standardizing and Simplifying the Basic Commodity Finance Structure
Commodity trade finance has historically been a profitable function of banks, but regulatory challenges and balance sheet restructuring following the financial crisis of 2008 have forced many banks to scale back or even exit this sector. With traditional funding sources curtailed, particularly for “under-banked” mid-sized to smaller producers and traders, there is an opportunity for alternative sources of finance.
Matrix Commodity Finance (MCF) has identified open account financing as our initial focus to build a bridge to connect the supply of abundant institutional buyers’ liquidity to the desired demand currently needed by commodity corporate clients. Our premise is based on the rationale that open account transactions are plentiful in supply, thereby mitigating replacement risk, while also structurally simple and easier to standardize, therefore creating a straightforward assessment.
- Unique purchasing opportunities
- Enhanced short-term yields
- Low correlation of returns with other asset classes
- Historically low default rates (Only 0.02% on transactions conducted between 2008 and 2011, ICC 2013 Global Risks Trade Finance Report)
- Sustainable and scalable investment opportunities
- Reduced traditional commercial dispute and commodity price risk
Matrix Commodity Finance (MCF) provides an entry point to qualified institutional participants, with the objective to achieve stable, non-correlated returns to a short-term self-liquidating asset class with statistically low probabilities of default.