Add New User

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

In many instances there is more than one user in an Originator organisation that requires access to the Exchange Trade Centre. To add a new Debtor, use the Add new User interface that is accessed directly from the Originator Dashboard using the yellow ‘Add new User’ menu item from the left side menu: My Organisation -> Add new User.

When this form is submitted, the new user receives an email inviting them to complete a simple form and submit it. Once the request is approved, the user will receive a second email to complete the process. Once completed, they too will have access to the Exchange Trade Centre.
IMPORTANT:- The new use must complete both forms using the same web same browser, otherwise their digital certificate will not work and they will not be able to access the Exchange Trade Centre.

The SB³ Trading Algorithm

The Sell, Bid Bumps & Buy [SB³] algorithm uses two mathematical calculations to regulate efficient, and smooth, trading in volume. The SB³ algorithm injects simple ingenuity into the practical issues of operating an efficient Exchange. The components of the algorithm are:

• Sell
• Buy
• Bid Bumps

 
Sell
Originators want a simple, fast, efficient and most importantly: reliable source of alternative working capital. This can only be achieved in one of two ways, either by having:

• sufficient deposits ‘waiting’ to be approved and lent (by a bank, for example)
• committed funds that are delivered automatically, subject to meeting specific criteria

 
As Credebt Exchange® is not a deposit taker or lender, it can only achieve the second alternative if it has the requisite funds committed for automatic delivery. One requisite component for the success of Credebt Exchange® relies on its ability to control the Sell (i.e. the Originator offer) price. The Sell price Minimum Offer stop setting is controlled from the Back Office.
Buy
Investors, provided with choice, will naturally ‘rush to quality’, meaning that they will always seek Investment Grade [IG] with the highest yields, first. This causes a trade imbalance where medium and low IG yields force ‘heavy discounts’ onto Originators. Together, these result in Originators’ Sell price erosion to unacceptable levels and ultimately, may destroy the Exchange business proposition.
To prevent this, the Exchange must focus and adequately deliver on the Investors’ primary requirements for yield and capital protection. During the negotiation of the Buy rate with the Retail Investors/intermediaries, they commit to automated trading in the Revolving Market. This confirmation occurs during the Investor signup process where the acceptance of automated trading, at the negotiated Buy rate, and is activated using the “I Agree” button. The second requisite component for the success of Credebt Exchange® is achieved by its ability to control the Investor bid and Buy price. The Buy price is then automatically manipulated by the two Bid Bump components of the SB³ algorithm.
Bumps
Investor automated, positive or negative, bidding adjustments, or Bid ‘Bumps’, occur using two variables in the SB³ algorithm, namely the:

• CDP Fixed Variable
• Order Floating Variable

 
CDP Fixed Variable
Credit Default Protection [CDP] is the Credebt Exchange® trade name for credit insurance. Organisations like AIG provide credit insurance to thousands of companies. Like Credebt Exchange®, their risk exposure is to the Debtor. OngThe AIG OnRisk insurance policy, written specifically Credebt Exchange® Master Agreement, provides CDP to Retail Investors on the Exchange. In the event that any Debtor fails to Settle (i.e. pay in full) their ETR, AIG pays 90% of the Face Value of the ETR.
When an Investor buys an ETR, they pay the Purchase Price (i.e. a discounted amount) of the Face Value. The Purchase Price is calculated as follows:
                                                                           Purchase Price =                    Face Value                  
                                                                                                           1+((180/360) x (Buy Price x 12)))
On average, the Purchase Price will be about 90.000% of the ETR Face Value. In such an example, if an ETR fails to Settle, the Investor’s risk exposure would be 0.000%. Therefore, to completely eliminate the Investor’s risk exposure, the Buy Price must be increased by a CDP Fixed Variable percentage to ‘fill the gap’. The CDP Fixed Variable increase is the first Bid Bump.
Order Floating Variable
There is no sure method of predicting what ETR value a Originator will post to the Trade Floor. Equally, there is no practical and efficient method of automatically matching the total value of any single Investor’s funds to the exact same and equal value of a collection of ETR†. To maintain the negotiated Investor return for a fixed period the ‘gap’, created between their purchased ETR and the total value of their fund, must be eliminated. As ETR Settle and new ETR are purchased, this gap will frequently fluctuate throughout the fixed period. Each specific Investor will have a different and changing percentage that is called the Order Floating Variable.
SB³ Algorithm Result
The unpredictability of the Order Floating Variable creates a true random number. Its unpredictability is combined with the CDP Fixed Variable to produce a single SB³ algorithm result. This truly random figure is then used to create a truly random set of multiple, automated Investor Bids that:

• creates volatility and/or liquidity on the Exchange;
• prevents reverse engineering for price derivation;
• drives the ‘best Buy price’ towards Originators;
• ensures no Originator Offer is left without a Bid;
• maintains Investor yield at all times;
• mitigates Investor risk; and
• enables institutional Investors to manually trade the volatility

 

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ETR Overview

Credebt Exchange® was founded in 2011, specifically to address two important issues in the economy: 1. liquidity in the micro-medium business sector; and 2. providing a strong, stable, cash equivalent alternative to bank deposits for Investors. Trading commenced in July, 2013 and Credebt Exchange® continues to deliver on its commitments to both businesses and Investors.

ETR Overview

The Investor’s yield is achieved by purchasing Exchange Traded Receivables [ETR] at a discount. As explained in the ETR Fact Sheet, ETR are invoices issued under Contract for goods and services supplied to investment quality companies or credit insured invoices from Investment Grade [IG] insurers. ETR provide Investors with:
Protected

• ETR payable by investment quality companies
• 100% ETR Repurchase (see AIG in the ETR Fact Sheet)
• 4-Tier capital protection (see ETR Overview)

 
Liquid

• Using RPA, typical investment period is 1-Year revolving
• Full or partial redemption available on request
• No ‘break charges’ or early redemption fees

 
Tax Efficient

• Significantly tax efficient for individuals with annual exemption
• Subject to status, may be off-set against capital losses
• Individual’s return taxed as a capital gain

 
Yield

• Substantial increase on comparable bank deposit rates
• Capital not committed for long periods, or years
• Higher yield than alternative cash equivalents

 

GLI Finance AIM: GLIF

Today and subject to final contract, GLI Finance Limited (AIM: GLIF) signed an agreement to act as the lead Investor to provide €25.0m of funding to the Exchange. This will bring the total year-to-date funding on the Exchange to €30.m and provides for a further capacity to purchase in excess of €150.0m ETR during 2014.
GLI Finance is a Guernsey-domiciled loan company listed on the AIM market of the London Stock Exchange (ticker GLIF). The Company’s objective is to produce a stable and predictable dividend yield, with long term preservation of net asset value. This the Company aims to achieve through the provision of secured lending to small and medium sized companies with the view to exit the CLO business over time and focus on the provision of alternative finance to SME’s.
The Company Strategy is to become a leading alternative provider of SME finance and in the last year the Company has made significant strides to achieve this by completing a number of partnership transactions with lending platforms. The platforms which have been invested in vary by geography, industry, size of lending and by type of lending. These include Global trade Finance, UK SME Lending, Offshore Lending, UK invoice discounting, European invoice discounting, Global multi-asset crown funding and UK property-backed lending.

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4-Tier Capital Protection

Investors’ funds are protected using 4-Tier Capital Protection, as follows:

• ETR Off-Set – ETR not Settled (i.e. paid in full) are replaced with Eligible ETR
• Originator Reserve – paid from Reserve on all Traded ETR (averages 10% of all ETR)

Originator credit insurance protection

• Credebt Exchange® loss and default reserve – paid from founders funds†; and/or
• AIG insurance

 

• Selling model, as opposed to a lending model
• No liens & no personal guarantees
• Low discount rates & no ‘face value’ charge
• Access up to 90% of your invoices’ value quickly

• Single Membership fee, regardless of volume
• Payment terms can be greater than 90 days
• Not required to sell all invoices/entire ‘book’
• No long term contract & leave at any time

• No ‘Debtor Concentration’ (i.e. no maximum value per Debtor)
• Block trading & trade automation are possible
• No retrospective, refactoring, or review fees
• Simple, streamlined online reporting