A commodity derivatives brokerage firm which specialises in the provision of hedging solutions to commodity producers, consumers and physical merchants engaged Cofarco as financial advisor in order to raise debt capital through a secured receivables based margin call finance facility.

The firm raised in May 2016 a self-liquidating facility based on credit extended for initial margin (IM) to a selection of commercial and industrial clients. The facility is over-collateralized at all times, with the lending extended dependent on pre-determined haircuts on the firm’s IM receivables as well as on the global cash position.

Full transparency is provided to the lender through daily and/or weekly reporting of the borrowing base and, in the case of a shortfall, a top-up mechanism is in place so as to restore the global loan to value ratio in compliance with the facility terms.