Amius Limited specialises in the provision of over-the-counter (OTC) derivative risk management solutions to the agri-commodity community, enabling its clients to efficiently manage their market price risk whilst maximizing trading opportunities and enhancing margins.
In line with general market practice, Amius extends credit lines for initial and variation margin to high quality corporate clients. Amius works with producers, merchants, processors, and consumers of agricultural and energy commodities.
With the continued expansion of its client base and the development of its product offering, the firm has been looking to introduce some debt to its liquidity pool to increase its credit extension capacity and to broaden its funding base.
Advised by Cofarco, Amius raised a US$ 10mln self-liquidating secured borrowing base margin call finance facility in December 2016. The facility allows Amius to borrow against credit extended to a selection of commercial and industrial clients. Funds drawn under the facility are used to finance margin call payments to clearing brokers alongside the firm’s own cash resources.
The facility is over-collateralized at all times and haircuts are applied against the firm’s margin call receivables and other eligible collateral. Full transparency is provided to the lender through weekly reporting of the borrowing base. In the case of a collateral shortfall, a top-up mechanism is in place to restore the loan to value ratio in compliance with the facility terms.
Commenting on the deal, Frederic Blanchi, Executive Partner at Cofarco says « This is a landmark facility in the commodity trade finance sector as Amius is neither a physical merchant nor an industrial concern, like most of the traditional borrowers in that sector. Yet, the transaction has created interest as it applies the well tested financing technique of a secured borrowing base facility to an OTC trading business, linking the amount of funding available to the actual amount of credit extended to eligible debtors. The facility offers strong layers of protection and a great level of transparency from a lender’s perspective and, for Amius, it offers flexible access to debt, enabling the firm to accelerate its commercial development and capture more business opportunities.