Receivables Purchase Agreement (RPA)
Get liquidity at a competitive rate and quick time to cash. Gain a competitive advantage over traditional funding sources through a combination of effective legal construct and tech solution.
Fit for
solution
Addressable
markets application
Solution
requirements
Aion Bank's RPA solution
RPA cash collateral required by Aion Bank
Structure
Account: owned by Aion
Access by Partner: No
Amount: 1.5 x expected lifetime default rate; the rate is assigned to portfolio value
Reference value: 5-10% of portfolio
Lifetime
Required collateral value is calculated on regular basis (biweekly/monthly)
- If the value is higher than previous calculation result- payment to replenish the collateral is required from Partner within agreed no of working days
- If the value is lower than previous calculation result- surplus is transferred to Partner by Aion also within agreed no of working days
Utilisation
Partial by Aion:
- Partner does not transfer the money from contractual obligation to Aion (repayments, margin, repurchase price) or is delayed with payment to Aion by more than agreed amount of working days
Collateral exit (full closure of balance on account):
- Neutral scenario: End of commercial relationship between Aion and Partner
- Negative scenario: Aion’s full utilisation of collateral due to Partner’s failure to satisfy financial obligations
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