Market updates and sector developments

Fintech provider StoneCo has obtained a landmark commitment of US$467.5m from the US International Development Finance Corporation (DFC) in the form of a revolving securitisation facility. The facility - which has a final maturity of seven years and a six-month availability period - finances the acquisition of up to US$14bn accounts receivables due by over 20 Brazilian financial institutions that are credit card issuers, on a non-recourse basis.

Involving SPVs in both Brazil and Luxembourg, the facility was established as a multi-compartment securitisation fund in the form of a fiduciary estate, governed by the Luxembourg Securitisation Law and sponsored by StoneCo. The transaction is the first of its kind for DFC in Latin America and represents a significant milestone in its mission to support private sector development and advance US foreign policy objectives in emerging markets.

The transaction strengthens Stone's ability to offer prepayment of receivables to micro, small and medium-sized businesses (MSMBs), which use the solution to optimise cashflow, financial flexibility and improve management. The focus of the facility is to support businesses that are women-led or have the majority of the workforce composed of women. The intention is that the resource will mainly impact entrepreneurs in the North and Northeast regions of Brazil.

With this deal, Stone is also pledging to become part of the 2X Global Challenge - not only because of the focus on supporting women-led businesses, but also because of the firm’s commitment to certain KPI reports in its workforce and leadership.    

In other news…

Analytics platform launched
ARC Risk Group has unveiled ARC Analytics, sister company to ARC Ratings and provider of complimentary access to analytical tools, data and insights across various asset classes. Interactive data dashboards - such as the Transaction Hub – are also available to market participants, with key details on numerous structured finance transactions.

Among the tools available on the ARC Analytics platform is a cashflow simulator, which performs comprehensive analysis - most commonly on structured finance transactions - to evaluate whether the cash generated by a portfolio of assets can satisfy the required interest and principal payments of the liabilities. Another tool is a portfolio risk calculator (PRC), which analyses the default risk of a portfolio of loans using a flexible mathematical framework. The PRC is commonly used for the asset side analysis of structured finance transactions.

Additionally, there are the banking risk and insurance risk tools, which respectively deliver detailed insight into a financial institution or an insurer’s credit profile by analysing financial statement data and qualitative factors.

Corinne Smith