Trade MAPS – the multi-bank asset participation program jointly deployed by Citi and Santander – has issued three-year rated asset backed securities of trade finance assets originated by the two banks.
The US$1 billion Reg. S/Rule 144A inaugural issue was launched off "Trade MAPS" – a global multi-bank program aimed at enhancing trade banks’ ability to support global trade flows and grow their trade finance portfolios. The program is intended to address the many challenges facing the banking industry including: capital management, liquidity, increased credit constraints and the new capital requirements imposed by Basel II and III.
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The program offers trade banks the ability to fund their originated trade finance assets in a capital and balance sheet efficient manner through issuances of medium- term asset backed securities. Trade MAPS enables participating banks to increase the efficiency of their capital dedicated to trade.
In this transaction, Trade MAPS 1 Limited issued three-year term notes backed by corporate and financial institution-related trade finance loans originated by Citi and Santander. A total of four classes of notes were sold all of which were publicly rated by Standard & Poor’s and Fitch Ratings. Citi, Morgan Stanley and Santander were the Joint Book Runners.
The three-year US$874.4 million triple-A rated Class A Notes were sold at one-month Libor plus 0.70%, the three-year single-A rated Class B Notes raised US$77.6 million at one-month Libor plus 1.25%, the three-year triple-B rated Class C Notes raised US$31.3 million at one-month Libor plus 2.25% and the three-year split rated double-B/single-B rated Class D Notes raised US$16.6 million at one-month Libor plus 5.00%. An unrated equity tranche of US$41.1 million was retained by the originators Citi (US$14.8 million) and Santander (US$26.3 million).
The Trade MAPS Program uses a multi-jurisdictional structure created by Citi that enables both Citi and Santander branches or entities domiciled in Asia, Latin America, Europe, Middle East and North America to sell trade finance assets via multiple SPEs/Trusts. These entities then fund themselves through an offshore SPE – Trade MAPS 1 Limited.
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By GlobalDataJohn Ahearn, global head of Trade at Citi, said: "The program is designed to benefit the broader industry by establishing an origination and funding platform for trade banks with global market positions, creating a highly diversified and granular pool of assets ultimately translating into access to a new and wider investor base."
Jorge Tapia, global head of Trade, Export and Commodity Finance at Santander, said: "The program ensures that we can increase the support to our clients in their international expansion, at the same time that we respond to current investor demand for high quality assets."
Working with Santander has enabled the introduction of a new asset class for the ABS investors globally.
Konel Parekh of Citi’s Specialized Trade Solutions said, "With multiple joint issuances planned for the future and with new global and regional banks we hope to create stable liquidity for this asset type."
Fabio José Fagundes, who led the MAPS initiative for Santander’s Global Trade Finance, said: "This is a transformational step for the future of Trade Finance. Through well-coordinated teamwork between co-arrangers, law firms and several control functions within our organizations we have invested considerably in a platform that will allow a sustainable future for the financing of global trade flows."
Citi Treasury and Trade Solutions (TTS) enables clients’ success by providing an integrated suite of innovative and tailored cash management and trade finance services to multinational corporations, financial institutions and public sector organizations across the globe. Based on the foundation of the industry’s largest proprietary network with banking licenses in over 100 countries and globally integrated technology platforms, TTS continues to lead the way in offering the industry’s most comprehensive range of digitally enabled treasury, trade and liquidity management solutions.
